Chinese Copper Smelters Hit Record Output as By-Product Prices Offset Margin Squeeze

Chinese copper smelters increased refined copper production to a record 1.25 million tons in March 2025, up 8.6% from the previous year, as rising prices for by-products like gold and sulphuric acid helped ease the pressure from negative processing margins. According to China’s National Bureau of Statistics, this surpassed the previous monthly high of 1.24 million tons set in December 2024, and brought first-quarter refined copper output to 3.54 million tons, a 5% year-on-year increase.

The world’s largest copper producer has faced a squeeze on profitability as rapid capacity expansion has outpaced the growth in global ore supply, pushing treatment and refining charges (TC/RCs) for copper concentrate below zero. This means many smelters are now paying to process concentrate, rather than being paid for the service—a historically rare and unsustainable scenario.

Despite these challenges, the surge in gold prices—up more than 60% since late 2023 and now trading above $3,300 a ton—has provided a crucial revenue stream. Smelters extract gold from copper ore and either refine it themselves or sell it to third parties, allowing them to benefit from the precious metal’s rally. In addition, sulphuric acid, another common by-product of copper smelting, has seen prices rise nearly 50% this year, reaching their highest level since 2022.

Analysts note that these by-product revenues are making conditions “less difficult for smelters,” even as the core business of copper refining remains under intense pressure. Smelters are also adapting by increasing their use of copper scrap and blending concentrates, and some are investing in new technologies to improve efficiency or diversify revenue streams.

Looking ahead, industry sources warn that if negative margins persist, some smelters may be forced to cut output or idle capacity, especially those without long-term supply contracts. However, for now, China’s smelters are leveraging every available advantage to maintain record production despite a tough operating environment.