Copper prices surged to a record $14,737 per tonne on the London Metal Exchange (LME) in September 2026, marking a nearly 50% increase over the past year. This rally, driven by US tariff expectations, tightening mine supply, and shifting global inventories, has created a paradox for Indian copper smelters. The Indian Primary Copper Producers Association (IPCPA) highlights a structural mismatch between growing global smelting capacity and available mined concentrate, leading to severe economic pressure on smelters. Treatment and refining charges (TC/RCs), which are the fees smelters earn for converting concentrate into refined metal, have plummeted from a positive $300-$400 per tonne to approximately negative $1,300 per tonne, meaning smelters are effectively paying to process concentrate.
This negative TC/RC environment, combined with a surge in zero-duty and low-duty refined copper imports under Free Trade Agreements (FTAs), is squeezing the second revenue stream of Indian smelters: value-addition margins. India, which imports about 85% of its copper concentrate requirements, is particularly vulnerable. Comex copper stocks have soared to a record 675,000 tonnes as traders capitalize on the Comex-LME price premium, while LME warehouse inventories have dropped to critically low levels, exacerbating the concentrate supply shortage globally and for Indian smelters.
In response, the Indian copper industry has urged the government to implement measures in the upcoming Union Budget to restore balance. These proposals include rationalizing customs duties on refined copper and semi-finished products by increasing them from 7.5% to 10-12%, imposing an additional 3% import duty on a Most Favoured Nation (MFN) basis, and invoking quantity restrictions under Section 9A of the FTDR Act, 1992, to curb import surges. Companies like Hindalco Industries, Hindustan Copper, Adani Kutch Copper, and Vedanta's Sterlite Copper are directly exposed to the negative treatment-charge environment. The Federation of Indian Mineral Industries (FIMI) also emphasized the importance for India to diversify supply sources, strengthen domestic production and recycling, and develop resilient international supply chains to manage market volatility.
