Falling sulphuric acid prices deepen China's copper smelter squeeze

Falling sulphuric acid prices are compounding financial pressure on China's copper smelters, which earn a significant share of their revenue from selling acid byproduct produced during ore processing. As acid values decline, smelter margins on treatment and refining charges, already compressed by a tight concentrate market, narrow further, pressuring operators' profitability. The transmission runs through the smelter cost stack and byproduct credits rather than through copper's end-demand, so the pressure is concentrated in Chinese refined output expectations and in the treatment charge benchmarks that set concentrate pricing globally. Chinese domestic copper and the Shanghai-quoted contracts are most exposed, along with the spread between Chinese smelter economics and international concentrate buyers. Traders should watch the next weekly sulphuric acid price assessments and China's monthly refined copper production data from the National Bureau of Statistics for confirmation of whether smelter utilisation cuts are materialising.

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