CRU has launched a new weekly copper concentrate treatment and refining charge (TC/RC) assessment to be published alongside its established monthly assessment in our Copper Concentrates service. The introduction of the weekly series reflects a shift in the dynamics of the copper concentrate market, as it evolves away from the traditional copper concentrate TC/RC benchmark toward more frequent, market-responsive pricing signals.
This insight identifies the shortcomings of the current negotiated-term approach and explains how miners and smelters that use CRU’s weekly or monthly TC/RC assessments stand to benefit.
The long evolution of the copper concentrates trade
Historically, the copper concentrate TC/RC benchmark was shaped by major miners and smelters. These included BHP, Freeport-McMoRan, Codelco, Glencore, Teck, Antofagasta Minerals, JX Nippon Mining & Metals, Mitsubishi Materials, Aurubis, Tongling Nonferrous, and Jinchuan. The benchmark was usually set within annual negotiations, but the leading players evolved over time as smelting capacity, mine supply, and regional demand shifted.
The annual benchmark is increasingly out of sync with the spot market
Spot treatment and refining charges have usually tracked the annual benchmark closely, averaging just $12/1.2¢ below contract terms from 2000 to 2023. But in 2024 and 2025, the gap widened to around $90 /t below contract levels. Meanwhile, the gap in 2026 is expected to widen further, with CRU’s monthly miner/trader spot terms assessment at -$120/-12¢ in March, while 2026 contract terms are $0/0¢ for sales to Chinese smelters. CRU’s first weekly assessment for 14-21 April showed spot TCs at -$124/-12.4¢, more than 10 times the historical average gap for 2000-2023.
How index-linked pricing helps
Using a copper concentrate index mitigates the issue of spot terms deviating significantly from contract terms by keeping pricing more closely tied to current market conditions. Instead of relying on a fixed annual price that can quickly become outdated, index-linked contracts adjust with spot price movements, more accurately reflecting market trends. This reduces the risk of long-term agreements drifting away from reality and makes pricing more responsive, transparent, and commercially relevant.
Contract terms are increasingly difficult to negotiate
Benchmark treatment charges are increasingly difficult to negotiate as the market loses balance between concentrate supply and smelting capacity. Expanding smelter capacity is placing pressure on the system and heightening benchmark tensions. Meanwhile, persistently low spot treatment charges are complicating annual benchmark agreements. In this environment, miners may push for similarly low benchmark terms, but smelters are unlikely to accept levels they consider uneconomic, thereby widening the gap between the two sides. As a result, miners and smelters are finding it more challenging to reach agreements on fixed prices, leaving the market without a clear benchmark. Since last year, we have also seen divergences in the willingness of smelters in different countries to agree to the same annual contract terms, as well as intra-country differences reflecting bilateral negotiations between individual miners and smelters.
How index-linked pricing helps
Using a copper concentrate index can make contract terms easier to negotiate by providing clearer, more neutral pricing references. Instead of turbulent negotiations over a fixed annual price that quickly becomes unreflective of the market, miners and smelters can agree to a price that moves with prevailing conditions. This reduces friction in negotiations, since the main commercial question becomes the index reference rather than the entire price. At the same time, index-linked contracts still preserve the benefits of long-term contracting, including logistics planning, continuity of supply, and stable relationships between miners, traders and smelters.
Miners lose value using contract terms when spot prices are low
Miners often feel value is lost when spot prices are below benchmark terms. A fixed annual deal may not reflect tighter market conditions. If the spot market is weaker than the benchmark, they may see it as unfair to be tied to terms that do not match current prices. Conversely, when spot terms rise above the prevailing annual benchmark, smelters may be impacted by the opportunity cost associated with having agreed to a lower fixed benchmark. Benchmark pricing can also overlook differences in concentrate quality or desirability, reinforcing the perception that miners are not being appropriately compensated for the value of the material they produce.
How index-linked pricing helps
Using a copper concentrate index can reassure miners that value is being generated under contract terms when spot prices are much lower, because the pricing mechanism is more closely tied to current market conditions. Since the index reflects prevailing market pricing, it better captures market changes than a benchmark set only once a year, reducing the risk that contract terms stay out of step with reality.
If index pricing is lower than the benchmark, why would smelters switch?
The copper market’s shift away from fixed contract terms is progressing gradually, and contracts will remain a feature of the market for some time even as their importance diminishes. For many participants, they still offer structure, predictability, and a familiar basis for negotiations. But the increasing use of short-term pricing mechanisms and spot-linked structures points to a market that is already becoming more flexible. This was evident when BHP, which last set the benchmark in 2012, said in 2015 that it was raising the share of sales priced through short-term mechanisms and spot terms. Meanwhile, declining treatment and refining charge revenues for smelters mean that a larger share of their income now comes from other revenue streams, reinforcing the changing role of contract terms in the industry.
Additionally, a smelter may still accept using a copper concentrate index even if spot TC/RCs are currently lower than benchmark terms because the index offers a more transparent, market-based way to price material over time. Rather than being locked into a benchmark that may not reflect shifting supply-demand conditions, the smelter gains a pricing mechanism that adjusts with the market and supports more stable long-term contracting. This can be attractive if the expectation is that spot TC/RCs will once again come under upward pressure, especially with the copper concentrate market forecast to move into a surplus in 2029. In that environment, an index can provide a fairer and more flexible framework while still giving the smelter continuity of supply and better visibility on future costs.
Why the miner/trader and trader/smelter split? Why both weekly and monthly?
CRU will continue to assess the miner/trader and trader/smelter copper concentrate treatment and refining charges separately for both its weekly and monthly assessments, rather than publishing a single combined assessment. The two prices reflect different aspects of the market, often with very different deal structures, participant mixes, and timing. In any given week or month, trading activity may be more concentrated on one side than the other, making it difficult to apply a fair and consistent weighting between them. Volumes can also vary materially by counterparty, while some transactions may be reported with varying levels of transparency or with a lag. As a result, a combined figure obscures important market distinctions and risks overstating or understating underlying conditions in either market segment. We believe there is a strong use case for incorporating either or both assessments into contract negotiations and agreements.
Our monthly assessment, backed by a robust and trusted methodology, will remain in place owing to its importance and relevance as an industry reference point. Our weekly assessment has a modified methodology and will serve as a more immediate and, in the future, a more powerful and adopted reference point.
CRU provides vital data to help the industry evolve
As the copper industry increasingly moves away from the traditional benchmark TC/RC, the launch of CRU’s weekly copper concentrate TC/RC is a timely and appropriate response to changing market dynamics. It reflects CRU’s continued commitment to providing market-relevant intelligence that evolves with the industry, while offering subscribers a more responsive view of pricing conditions. The new TC/RC is available to CRU’s Copper Concentrate Monitor subscribers. If you would like to learn more about our TC/RC assessments, the methodology and its use cases, please reach out to any of us; our contact details are below.
