Last week, market participants from across the world met in Santiago to discuss the copper market, though at times the conference was more focused on acid than the red metal.

Participants were meeting as prices near all-time highs, exchange stocks remain swollen, and TCs continue to fall. There was certainly no shortage of things to discuss in Chile.

Sulphuric acid takes the focus

Much of CESCO this year was as focused on sulphuric acid as on copper. The conflict in the Gulf has drastically increased acid prices; in China, prices have roughly doubled since the start of the conflict.

China is reportedly set to ban exports of sulphuric acid exports as a result. This, along with reduced flow out of the Gulf, may affect SX-EW production, which relies on acid. However, the extent of any potential disruption is less clear.

On the other side, higher acid prices will help smelters and could pull TC/RCs down even further. However, only smelters in China are likely to be able to exploit the higher prices. This is because ex-China smelters tend to lock in prices on a longer-term basis.

Low TC/RCs and changing smelter economics

Copper concentrate TC/RCs are hitting ever lower lows in recent weeks. A well-attended BHP tender reportedly closed for smelter purchasing at USD $-78/t. This is down from $-58/t only a few months ago.

Trades reportedly closed this week at below $-110/t for smelter purchasing, though this deal had relatively unique precious metal content and payables. Either way, the trend for smelter purchasing is downward. Multiple sources noted that due to high acid prices TC/RCs could fall even further.

It’s hard to predict where the bottom of the market will be, but the higher acid goes, the more support smelters will receive.

A broken TC benchmark system

Despite the conclusion of benchmark copper concentrate TC/RC discussions between Chinese smelters and Antofagasta at $0/t, Japanese, Korean, and European smelters have been reluctant to accept flat TCs, with $0/t well below levels that smelters had previously accepted. Despite by-products and premiums going a long way to supporting smelters, some remain reluctant to accept lower TCs.

However, during CESCO Week, Benchmark Mineral Intelligence heard reports of multiple smelters outside of Europe accepting $0/t TCs in some instances. However, other annual contracts were reportedly agreed in the $10s/t and $20s/t. Most of these deals have, however, included some side terms or compromises, including financing, acid buy backs, copper buy backs, and altered precious payables.

Ultimately, this is a continuation of the trend from last year that saw a bifurcated benchmark system. All sources noted that discussions had been harder this year, and many noted that ex-China smelters are increasingly not following the benchmark system.

High prices divorced from fundamentals

Copper's high prices in 2026 were a significant talking point at CESCO. Supply and demand fundamentals do not seem to fully account for these high prices – last year, the copper supply surplus was the largest in over a decade, at 616kt. Visible exchange stocks are also high and have been floating around multi-decade highs in recent weeks.

“The copper price is completely unhinged from the fundamentals,” said one trader source, noting the current market surplus. A number of reasons why prices are so high were put forward at CESCO Week.

Stock build-up in the US, high-profile mine disruptions, capital overspill from financial markets, AI interest, and expectations of long-term shortages were all highlighted as potential causes of the high prices.

Arbitrage uptick

Since early April there has been some uptick in the longer-term arbitrage, with the arbitrage now at $467/t by December. This is wider than it had been until recently and is getting closer to a level where participants may start positioning new material to the US.

Some market sources told us there was increased interest in buying copper to send to the US, though this had so far only translated into enquiries.

The increased arbitrage has happened as the LME forward curve has flattened significantly; however, the CME remains in a strong contango. The increased arbitrage may also indicate increased expectations that the US may impose tariffs on copper cathode, coming as it did after a vague statement from the US on copper tariffs.

This articles draws on data and analysis from Benchmark's Copper Service. To find out more, fill in the form below and one of the team will be in touch: