Leading Chinese copper smelters, grappling with a significant downturn in processing fees that threatens their profitability, are set to convene in Shanghai for a critical quarterly meeting next Thursday. Key industry players like Jiangxi Copper and Tongling Nonferrous Metals Group will discuss the current state of the concentrate market, future production plans, and establish spot processing fees guidance for the second quarter.
This meeting comes at a pivotal moment for China’s copper industry, the largest global producer and consumer of refined copper, which is facing unprecedented challenges. A combination of global supply disruptions and aggressive capacity expansion within China has led to fierce competition and plummeting treatment and refining charges (TC/RCs), squeezing smelters’ margins.
Quarterly meetings by the Copper Smelters Purchasing Team traditionally set floor prices to guide smelters in their negotiations with miners for concentrate supplies. This forthcoming session follows discussions between copper companies and the government regarding potential production cuts and capacity controls, measures that have recently contributed to a rise in refined copper prices.
Despite a slight decrease in China’s refined copper production from record highs late last year, output in the first two months of 2024 was still up by 11% year-on-year. However, production may drop further in the second quarter due to peak maintenance periods and some smelters scheduling their annual repairs earlier than usual.
Amid these developments, benchmark copper futures on the London Metal Exchange saw a modest decline, trading 0.6% lower at $8,925 a ton. However, earlier this week, prices had surged to $9,164.50, buoyed by anticipation of potential interest rate cuts by the US Federal Reserve. 
