Copper processing charges could fall further next year, says Cochilco

Miners or intermediaries pay treatment and refining charges (TC/RCs) to smelters to process copper concentrate into refined metal. Shortages of copper concentrate this year have already forced some Chinese smelters to cut output, and analysts expect further cuts next year.

Cochilco said it forecasts demand for concentrates to rise 10.5% next year as China and India boost their smelting capacity, and new smelters come online in Indonesia and the Democratic Republic of Congo.

Supply, meanwhile, is projected to tighten 3.4%.

“Since 2019, we’ve seen a deficit in the global balance of concentrates, which has continued to date and is expected to worsen between 2024 and 2025,” Cochilco said in its report.

“Consequently, TC/RC would reach a minimum in 2025,” it said.

Cochilco said it expects a deficit of 1.9 million tons of concentrates this year, pushing processing charges to $40 per ton and 4 cents per pound in 2024. Cochilco did not present a forecast for 2025.

In Chile, the world’s biggest copper producer, concentrates accounted for 53% of production last year. They are expected to rise to 77% by 2040, according to Cochilco.

This year, Cochilco said Chile’s concentrate production is expected to be driven by Teck’s Quebrada Blanca, Codelco’s Chuquicamata and BHP’s Escondida, offsetting a decline at Anglo American’s Los Bronces, which closed a concentrator.