The copper supply chain.

Where copper comes from

Global primary copper production was roughly 23 million tons in 2025, per USGS estimates, and it is concentrated in a handful of countries. Chile is the giant at about 5.7 million tons — roughly a quarter of world output — followed by the Democratic Republic of Congo at about 3.0 million tons (~13%), Peru at about 2.8 million tons (~12%), China at about 1.9 million tons (~8%), and Russia at about 0.9 million tons (~4%). The top five producers supply roughly 62% of mined copper; secondary producers include the United States, Zambia, Australia, and Indonesia. Refined copper output was about 26.9 million tons in 2024, per IEA figures. Two structural facts shape everything downstream. First, ore grades have been falling for decades — down more than 25% over two decades, with Chilean grades averaging 0.6 to 0.7% and the giant Escondida mine below 1% and possibly heading toward 0.5%. Lower grades mean more rock moved, more energy burned, and more cost per ton of metal. Second, new supply is constrained by permitting delays, rising energy costs, and disruptions — global mine output fell 1.1% and concentrate output 2.6% in the first half of 2026, with sharp declines in Chile, Indonesia, and the DRC, and the prior year's Cobre Panama closure still tightening concentrate availability.

China's dominant share

Mines do not produce usable copper — they produce concentrate, a powder containing 24 to 40% copper. Smelters buy that concentrate, typically paying miners about 96% of the contained copper value minus treatment charges (per tonne of concentrate) and refining charges (per pound of metal), with penalties for deleterious elements and credits for precious metals. Smelters often operate as toll processors, leaving price risk with the miners. The refining sequence runs concentrate to matte to blister copper (98–99.5%) to anodes, and then electrolytic refining yields 99.99% pure copper cathode — the standard tradable refined form. Here is the geopolitical fact that dominates the industry: China controls 45 to 51% of global smelting and refining capacity, accounts for about 44% of refined production, and is planning roughly 45% more smelting capacity by 2027 — while also consuming about 58% of the world's refined copper. The DRC has overtaken Chile as the world's second-largest copper refiner (8% versus 7% share); Japan and India round out the top five. Chile built its last smelter in the 1990s and Peru has only one operating refinery. The tightness shows up in treatment charges: the 2025 annual benchmark was a record low $21.25 per tonne plus 2.125 cents per pound, spot charges went negative in 2025–2026 — reportedly as low as negative $60 per tonne, meaning smelters effectively paid to secure feed — and the 2026 annual benchmark negotiation deadlocked. Negative treatment charges are the market screaming that concentrate is scarcer than smelting capacity.

COMEX and LME: what the prices mean

Refined copper is priced on two public exchanges. The LME (London Metal Exchange) 3-month contract is the global benchmark; COMEX (CME Group, New York) is the US benchmark, with a restricted list of deliverable cathode brands — no Congolese brands, only two African brands (both Zambian), and more than a third of approved brands Chilean or Peruvian. The spread between them — the COMEX-over-LME premium — has become the market's tariff barometer: it exceeded $1 per pound in July 2025 on expectations of a US copper tariff, imploded when refined copper was exempted, then widened again in 2026 (spot around 3% of LME; the March 2027 forward near $1,000 per ton, about 7% of LME) as traders price a possible refined-copper tariff. For scrap sellers, the benchmarks matter because yard and dealer pricing tracks them — offers rise and fall with COMEX and LME trends. Nobody needs to trade futures to sell copper well, but knowing whether the benchmarks are at records or in retreat tells you what kind of market you are selling into. As of early September 2026, both benchmarks were at all-time records.

Copper questions, answered.