Copper Soars to Record Highs as Smelters Struggle with Zero Processing Fees
Copper prices have hit record highs due to surging demand from AI data centers and power grids, but smelters are struggling. Copper spot prices on the London Metal Exchange traded at $14,285 per ton as of August 13, near the all-time high of $14,455 set on August 6.
The copper supply shortage persists despite new mine development being slow to materialize. According to the International Energy Agency (IEA), it takes an average of 17 years from mine discovery to production. The IEA projects that copper supply will fall short of demand by approximately 25% by 2035, even if all currently planned mining projects proceed on schedule.
Smelters are competing fiercely for limited feedstock, driving processing fees down to zero for annual contracts this year. Smelting fees fell from $80 per ton in 2024 to $21.25 per ton last year, and spot market fees have been in negative territory for several months. Smelters are now relying on byproducts like gold, silver, and sulfuric acid to stay afloat.