en.Wedoany.com Reported - The tightening supply of sulfuric acid in China is becoming a prominent variable in the copper industry chain. Against the backdrop of continuously falling copper concentrate processing fees, the sulfuric acid shortage, compounded by export restrictions, is putting pressure on the profit model of copper smelters. China has suspended the allocation of this strategic material for copper acquisition, prioritizing supply for the domestic market instead.

The treatment and refining charges (TC/RC) for imported copper concentrate in China have been in negative territory for 16 consecutive months, standing at approximately -$86.7 per tonne at the end of April, down from the previous week and far below levels a year ago. This situation reflects a shortage of available copper concentrate in the market. Some smelters are still accepting negative processing fees because revenue from sulfuric acid, a byproduct of the production process, can be used to offset losses. According to industry analysts, every 100 yuan (approximately $14.6) profit per tonne of sulfuric acid can compensate for about a $10 per tonne loss in processing fees. Producing one tonne of copper generates 3.5 to 4 tonnes of sulfuric acid, making it a key revenue source for smelters.

The sulfuric acid shortage, exacerbated by geopolitical conflicts and China's export restrictions, could impact copper production levels in different regions globally. The shortage is particularly acute for copper producers using the solvent extraction-electrowinning (SX-EW) process, which relies on sulfuric acid to extract metal from ore and accounts for roughly one-fifth of global refined copper output. The sulfuric acid shortage threatens copper production, potentially leading to higher costs and operational constraints.

Market experts point out that the key is to observe whether the sulfuric acid shortage will affect smelter output levels and global copper supply.

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