Japanese copper smelters are negotiating 2026 treatment and refining charges (TC/RCs) with global miners, seeking agreements at levels different from China-set benchmarks, which are expected to stay low, the head of the Japan Mining Industry Association (JMIA) said on Thursday.
TC/RCs, the fees paid by miners to turn concentrate into refined metal, are a key source of revenue for smelters. The charges tend to fall when concentrate supply tightens and rise when ore availability increases.
Global smelting capacity is expanding faster than mined supply, led by China, creating a persistent tightness in concentrate that has squeezed smelters’ margins.
For 2025 annual TC/RCs, a Chilean miner and a Chinese smelter agreed at $21.25 a ton and 2.125 cents per pound, while Japanese smelters secured higher terms at $25 a ton and 2.5 cents per pound for 2025, according to two industry sources.
“For 2026, Japanese smelters are trying to establish a market distinct from the global benchmark by securing contracts individually rather than tracking the benchmark,” JMIA chairman Tetsuya Tanaka said.
“It’s unclear where levels will land, but such moves are underway,” he said.
Miners’ stances vary, he said, with some insisting that selling to the bidder with the best terms is in tune with economic principles, while others see risks in relying heavily on a particular country.
Tanaka warned that Japanese smelters would continue to face tough conditions, with a significant negative impact anticipated on next year’s earnings as “smelters in some regions” are likely to keep negotiating at low TC/RC levels.
In October, Japan, Spain and South Korea issued a rare joint statement expressing deep concerns about tumbling TC/RCs, warning that both smelters and miners cannot develop sustainably under current conditions.
Mitsubishi Materials, where Tanaka serves as president, said on Wednesday it plans to cut its primary copper smelting output by 30% to 40% by the 2035 financial year as it shifts toward secondary smelting to improve profitability.
China’s top copper smelters refrained from setting fee guidance on copper concentrate processing for the last quarter of 2025, the third such decision in a row, sources said, highlighting a prolonged feedstock shortage in the industry.
(By Yuka Obayashi; Editing by Thomas Derpinghaus)
