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South Korean smelter LS MnM plans to cut its copper concentrate intake to 1.4 million tonnes in 2027, from a budgeted 1.65 million tonnes in 2026, because of maintenance on two smelting lines, mining sources told Fastmarkets in London on Friday October 23. This followed the company's statement at the start of LME Week that it was considering cutting purchases because of record-low treatment charges (TCs).
The reduction of about 15% matched a figure given to Fastmarkets by a Europe-based mining source on Thursday October 22. Market participants were divided over the announcement. Some said LS MnM’s planned reduction and potential Chinese cuts appeared genuine.
Others said the timing reflected positioning ahead of 2027 annual benchmark contract negotiations. LS MnM told Fastmarkets that no specific figures or reduction targets for 2027 have been determined.
LS MnM, which operates the Onsan smelter in Ulsan with annual capacity of 680,000 tonnes of refined copper, said on Monday October 19 that it was considering “flexible adjustments” to copper concentrate purchases depending on purchase terms, market conditions and operational efficiency, Reuters reported.
“Rather than maintaining throughput by purchasing raw materials on unfavorable terms, we are carefully considering how to protect profitability through reasonable adjustments to raw material intake,” an LS MnM official said, according to the Korea Times.
LS MnM said it had already been operating with lower-than-usual intake volumes this year and was considering further reductions.
“Should current market conditions persist, we believe additional production cuts beyond the current reduced operating levels would likely be unavoidable,” the company said in an emailed response to Fastmarkets’ questions.
The company said it was developing its business plan for 2027, and that details on the scale, timing or expected impact of any adjustments were not yet available.
Maintenance on two lines
The flash furnace and the Mitsubishi line at Onsan are both scheduled for maintenance next year, Fastmarkets understands.
“Every year they have maintenance, but [on a] different line. It is rare that they have [had] two lines [under] maintenance in one year,” one Chilean miner said.
“Yes, it’s a cut, but [it is] planned maintenance. [It] could be price-driven, bringing forward maintenance from down the road,” another miner from South America added.
The first miner also said LS MnM’s annual budget was typically set above what the smelter actually processed. “[LS MnM] always start[s] with [a budget of] 1.65 [million tonnes], [but] they never achieve it, even in a long market.”
Cut “real”, “planned”, “standard playbook”
A North American trader said: “The Korean [cut] seems to be real, and [there is] also a lot of potential for Chinese cuts.”
A European trader said they were hearing a range of rumors about production cuts, adding that Chinese smelters often raised the prospect around LME Week.
A second Europe-based mining source said: “Of course they would announce this going into negotiation season – it is standard playbook.”
Long-term supply
LS MnM, South Korea’s only dedicated copper smelter, mainly sources its copper concentrates under long-term supply contracts and seldom buys in the spot market, sources told Fastmarkets in July 2025.
Antofagasta and LS MnM finalized mid-year treatment charges/refining charges (TC/RCs) of $0 per tonne/0 cents per lb in July 2025, matching the terms agreed between the Chilean miner and Chinese smelters for some 2026 supply, Fastmarkets reported.
LS MnM told Fastmarkets that a reduction in concentrate intake would be expected to have a corresponding impact on its copper cathode and sulfuric acid production, but that the extent of any impact had not yet been determined. The company also said it intended to maximize the use of recycled raw materials within its operational capacity.
LS MnM said it would prioritize deliveries to key long-term customers and that some export volumes could be adjusted, according to the Korea Times. It is also considering improving recovery of precious metals and by-products, the newspaper reported.
Smelter capacity outpacing mine supply
Global copper smelting capacity rose by about 3.4 million tonnes over 2024 and 2025 to 29.1 million tonnes, according to the International Copper Study Group (ICSG). That was roughly four times the 860,000 tonne rise in global mine production over the same period, ICSG data shows.
The ICSG has cut its forecast for global copper mine production growth in 2026 to 1.3%, from 1.6% in April and 2.3% in October 2025, in its third consecutive downward revision.
Global copper concentrate production fell by 2% year on year in January-July, led by declines of 8.8% in Chile and 29% in Indonesia, according to the ICSG’s September Copper Bulletin.
Other smelters in Asia have also announced cuts. Mitsubishi Materials plans to end copper concentrate processing at its Onahama smelter in Japan after March 2027, and Furukawa is reportedly planning to cut refined copper production by about 3% year on year in the second half of fiscal 2026, the Korea Times reported.
Fastmarkets calculated the weekly copper concentrates TC index, cif Asia Pacific — the midpoint between smelter and trader buying levels — at $(281) per tonne on October 23, down by $3 per tonne from $(278) per tonne on October 16.
The copper concentrates TC implied smelters purchase, cif Asia Pacific, was calculated at $(245) per tonne on the same day, down by $3 per tonne from $(242) per tonne a week earlier.
The copper concentrates TC implied traders purchase, cif Asia Pacific, was calculated at $(317) per tonne on October 23, down by $3 per tonne from $(314) per tonne a week earlier.
(This report has been updated to include LS MnM’s response to Fastmarkets’ request for comment, which was received after initial publication.)
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