LS MnM weighs output adjustments as copper concentrate shortage squeezes smelters
LS MnM's Onsan Smelter / Courtesy of LS MnM
Record-low treatment charges pressure margins despite surging copper prices
LS MnM, Korea’s only dedicated copper smelter, is considering adjusting copper concentrate purchases and production to protect profitability as a global shortage of the raw material drives processing fees to record lows, the company said Monday.
The move comes as London Metal Exchange (LME) Week 2026 opens in London on Monday, bringing together miners, traders and smelters to discuss market conditions and commercial terms. Copper prices are approaching record highs, while spot treatment and refining charges (TC/RCs) for copper concentrate have plunged to record lows, squeezing smelters’ margins.
The imbalance reflects a structural mismatch between constrained mine supply and expanding smelting capacity.
In a March analysis, the International Energy Agency (IEA) cited declining ore grades, rising capital costs and lengthy mine development timelines as key constraints on copper concentrate supplies. New smelting capacity is growing faster than mine production, intensifying competition for raw materials. The IEA warned that low TC/RCs could persist over the medium term.
The International Copper Study Group (ICSG), in a forecast released Wednesday, projected global copper mine production growth of 1.3 percent this year, marking its third consecutive downward revision. It had forecast growth of 2.3 percent in October last year and 1.6 percent in April.
Global copper concentrate production fell 2 percent year-on-year in the January-July period, led by declines of 8.8 percent in Chile and 29 percent in Indonesia.
By contrast, global copper smelting capacity increased by approximately 3.4 million tons between 2024 and 2025, reaching 29.1 million tons, according to the ICSG. The increase was roughly four times the growth in mine production over the same period, which totaled about 860,000 tons.
Smelters elsewhere are responding. Mitsubishi Materials Corp. plans to end copper concentrate processing at its smelter in Onahama, Japan, after March 2027. Furukawa is reportedly planning to cut refined copper production by about 3 percent year-on-year in the second half of fiscal 2026. Major Chinese smelters have also discussed potential production cuts, according to Reuters.
LS MnM operates the Onsan Smelter, which has an annual copper cathode production capacity of 680,000 tons. It is considering flexible adjustments to concentrate intake based on purchase terms, market conditions and operational efficiency rather than maintaining production at unfavorable prices.
The company is also exploring ways to cushion the impact, including increasing recycled raw material use, improving the recovery of precious metals and by-products and diversifying earnings through its battery materials business.
Lower concentrate intake could reduce output of copper cathode and sulfuric acid. LS MnM said it would adjust sales volumes and supply plans while prioritizing stable deliveries to key long-term customers. Some export volumes could be adjusted depending on production levels and customer agreements.
“Rather than maintaining throughput by purchasing raw materials on unfavorable terms, we are carefully considering how to protect profitability through reasonable adjustments to raw material intake,” an LS MnM official said.
The official added that the company would balance profitability with its responsibilities to customers and suppliers.
“We hope LME Week 2026 will provide an opportunity to broaden understanding of supply-demand imbalances in the copper concentrate market and help miners and smelters explore mutually sustainable commercial terms,” the official said.