On October 31, 2025, Reuters reported that China’s Non-Ferrous Metals Industry Association recommended setting capacity limits for certain metals, including copper, lead, and zinc. The association noted that processing fees (Treatment and Refining Charges, TC/RC) have declined, putting pressure on smelters’ profitability. At the same time, capacity expansion has outpaced market demand, resulting in overcapacity in the copper, lead, and zinc sectors.

Officials from the association stated that intense competition in the smelting and refining sectors—described as “involution-style” competition—has weakened companies’ bargaining power in raw material procurement, compressing profit margins. In the aluminum sector, for example, a capacity cap of 45 million tons implemented since 2017 has helped maintain profitability and provided a more stable market environment.

The report also highlighted that major Chinese copper smelters have refrained from issuing guidance for processing fees for three consecutive quarters in 2025, with copper concentrate processing fees falling to record lows, reflecting pressure from both supply and profitability challenges. The association recommends capping smelting capacity for copper, lead, and zinc to alleviate overcapacity, promote stable industry development, and support sustainable long-term operations.

This measure aims to regulate industry capacity expansion, stabilize market order, and reduce the risks of price volatility and declining profitability caused by excessive competition.