Record gold prices aid Chinese copper smelters in offsetting losses

Soaring gold prices are keeping Chinese smelters afloat and may prevent copper production from falling this year.

China's copper smelting industry is facing a downturn. A steadily increasing number of smelting facilities in the country is confronted by a shortage of copper concentrate.

Tariffs charged by smelters for copper treatment and refining (TC/RC) in China have remained negative since December 2024. As of April 18, the TC/RC copper concentrate index hit a record low of -$34.71 per tonne. A negative TC/RC means that Chinese companies have to pay money to raw material suppliers for processing concentrate into refined metal.

By-products of concentrate processing are gold and sulfur. Record gold prices help offset some of the losses incurred from processing concentrate containing high levels of the precious metal.

Meanwhile, copper smelting capacity has increased by 25% since 2021. The figure has also risen by 8% since 2024. This year, the volume of copper refining amounted to 12.78 million tons. It is also expected to grow by another 10%, despite the shutdowns of copper mines in other countries. This signals a recovery in the industry, despite months of negative TC/RCs.