Monday, September 15, 2025

Major Copper Smelters to Slash Output as Supply Crunch Looms

Global copper smelters are being forced to cut production significantly due to a worsening shortage of copper concentrate supply.

South Korean smelter LS Metals and Materials announced plans to reduce output by 40,000 metric tons this year, representing over 5% of its 680,000-ton annual capacity. The cutbacks come after supply disruptions from the Cobre Panama mine closure and Indonesia’s new concentrate export ban.

Korea relied on Indonesia for 19% of its 2.2 million tons of imported copper concentrate in 2023, with another 5.5% coming from Panama according to trade data. As spot treatment and refining charges plummet to historic lows, maintaining prior production levels has become untenable for many smelters.

Leading Chinese operators are also targeting 5-10% production cuts amid the supply crunch and negative margins, with treatment charges recently assessed at just minus $70 per ton and 7 cents per pound by pricing agency Platts. 

The cuts exacerbate a tightening that has propelled copper prices close to $10,000 per ton, a two-year peak, as shortages emerge. Analysts cite over 1 million tons of lost mine supply, coupled with rebounding manufacturing demand and rising usage in electric vehicles and new technologies.

Piotr Ortonowski of Benchmark Mineral Intelligence says that, “The long-term energy transition demand story against underinvested new mine supply remains intact.” While a correction from recent frenzied buying is possible according to one trader, industry sources expect visible stock drawdowns soon, maintaining upward price pressure.

For fund managers like Jay Tatum of Valent Asset, copper’s scarcity marks a shift “from an investment story to one where promises are starting to be delivered” as rising intensity clashes with supply side challenges.


Information for this story was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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