Japan's Mitsubishi Materials (5711.T) is considering scaling back copper concentrate processing at its Onahama Smelter & Refinery as falling treatment and processing charges (TC/RCs) weigh on earnings, it said on Monday.
In June, peer JX Advanced Metals (5016.T) said that it was also considering copper production cuts due to a significant deterioration in ore purchase terms.
Mitsubishi Materials said the worsening TC/RCs from miners were expected to further erode smelting margins.
"To maintain and improve profitability, we need to raise the ratio of recycled raw materials and accelerate the shift to feedstock less vulnerable to TC/RC fluctuations," the company said in a statement.
It is now considering the possibility of a partial shutdown of production facilities and a reduction in copper concentrate processing at Onahama, after planned maintenance from October to November this year, Mitsubishi Materials said.
Last month, Japan Mining Industry Association Chair Tetsuya Tanaka warned that domestic copper smelters faced tough mid-year negotiations with global miners over TC/RCs, saying they could not accept the extremely low terms agreed by Chinese smelters.
Some Chinese smelters agreed TC/RCs of $0 per metric ton and 0 cents per pound with Chilean miner Antofagasta (ANTO.L) during mid-year talks. These rates are seen as an industry benchmark and far below the 2025 annual charges of $21.25 a ton and 2.125 cents per pound.
Tanaka, who is also Mitsubishi Materials president, said at the time that shrinking smelting margins were putting non-Chinese smelters under severe pressure.
