Theme of the Day: Copper market takeaways from CESCO Week 2026

A few weeks ago, market participants from across the world met in Santiago to discuss the copper market, though at times the conference was more focused on acid than the red metal, according to Benchmark Mineral Intelligence (BMI). Participants were meeting as prices near all-time highs, exchange stocks remain swollen, and TCs continue to fall. There was certainly no shortage of things to discuss in Chile. Sulphuric acid took much of the focus at CESCO this year. The conflict in the Gulf has drastically increased acid prices; in China, prices have roughly doubled since the start of the conflict. China is reportedly set to ban exports of sulphuric acid as a result. This, along with reduced flow out of the Gulf, may affect SX-EW production, which relies on acid. However, the extent of any potential disruption remains unclear. On the other side, higher acid prices will help smelters and could pull TC/RCs down even further. However, only smelters in China are likely to be able to exploit the higher prices, as ex-China smelters tend to lock in prices on a longer-term basis. Copper concentrate TC/RCs are hitting ever lower lows in recent weeks. A well-attended BHP tender reportedly closed for smelter purchasing at $-78/t, down from $-58/t only a few months ago. Trades reportedly closed this week at below $-110/t for smelter purchasing, though this deal had relatively unique precious metal content and payables. Either way, the trend for smelter purchasing is downward. Multiple sources noted that due to high acid prices, TC/RCs could fall even further. It is hard to predict where the bottom of the market will be, but the higher acid goes, the more support smelters will receive. Despite the conclusion of benchmark copper concentrate TC/RC discussions between Chinese smelters and Antofagasta at $0/t, Japanese, Korean, and European smelters have been reluctant to accept flat TCs, with $0/t well below levels that smelters had previously accepted. During CESCO Week, BMI heard reports of multiple smelters outside of Europe accepting $0/t TCs in some instances, while other annual contracts were reportedly agreed in the $10s/t and $20s/t. Most of these deals have included some side terms or compromises, including financing, acid buy backs, copper buy backs, and altered precious payables. All sources noted that discussions had been harder this year, and many noted that ex-China smelters are increasingly not following the benchmark system. Copper's high prices in 2026 were a significant talking point at CESCO. Supply and demand fundamentals do not seem to fully account for these high prices — last year, the copper supply surplus was the largest in over a decade, at 616kt. Visible exchange stocks are also high and have been floating around multi-decade highs in recent weeks. One trader source noted that the copper price is completely disconnected from the fundamentals, pointing to the current market surplus. A number of reasons why prices are so high were put forward at CESCO Week, including stock build-up in the US, high-profile mine disruptions, capital overspill from financial markets, AI interest, and expectations of long-term shortages. Since early April there has been some uptick in the longer-term arbitrage, with the arbitrage now at $467/t by December. This is wider than it had been until recently and is getting closer to a level where participants may start positioning new material to the US. Some market sources noted increased interest in buying copper to send to the US, though this had so far only translated into enquiries. The increased arbitrage has happened as the LME forward curve has flattened significantly, while the CME remains in a strong contango. The increased arbitrage may also indicate increased expectations that the US may impose tariffs on copper cathode, coming as it did after a vague statement from the US on copper tariffs.