Sulfuric Acid Prices Surge: Two Major Chinese Copper Smelters Double H1 Profits
Nashnova编辑部
Jiangxi Copper and Tongling Nonferrous posted a combined RMB 11.6 billion in H1 net profit — up 107% year-on-year — driven not by copper itself but by a record rally in by-product sulfuric acid, rewriting how smelter economics work.
Profits doubled — but not because of copper?
The two smelters reported combined H1 net profit of RMB 11.6 billion (~US$1.73 billion), up 107% year-on-year.
Tongling stated in its earnings report that strong prices for sulfuric acid and precious-metal by-products were the main source of smelting-segment profit.
This means → the profit engine has shifted from the core business of refining copper to the by-products — sulfuric acid and gold — generated alongside it.
Why did sulfuric acid suddenly become so valuable?
Sulfuric acid is a by-product of pyrometallurgical smelting — the mainstream process that melts copper ore at high temperatures into pure copper. Sulfur in the ore oxidizes naturally into acid.
The Middle East conflict tightened global sulfuric acid supply. China's sulfuric acid price hit a record high in June — the highest since data began in 2013.
In plain terms = sulfuric acid costs smelters almost nothing to produce. When supply tightens and prices rise, every cent of the increase drops straight to the bottom line.
Processing fees have gone negative — how are these two still profitable?
The copper-concentrate treatment charge tracked by Fastmarkets fell to a record low of negative US$219.1 per tonne last Friday. That is the fee smelters charge miners for processing ore.
Put simply = for every tonne of concentrate processed, the smelter pays the miner rather than getting paid.
Jiangxi Copper and Tongling are less exposed because both own captive mines, partially offsetting the cost of buying third-party concentrate. Combined with by-product revenue, this creates a double buffer.
This reflects a deeper shift: in a deeply negative treatment-charge environment, owning ore matters more than knowing how to smelt it — captive mines are becoming the core moat.
Is the entire non-ferrous sector booming?
Government data show that profits at China's large-scale non-ferrous smelting and rolling enterprises rose 92% year-on-year in the first seven months of 2026. Chalco posted its highest-ever H1 net profit, lifted by higher aluminum prices and lower costs.
LME copper is trading near record highs and has rallied for nine consecutive weeks — the longest streak since 2020.
Drivers include trade-flow disruption + mine-supply outages + rising demand expectations from data centers and renewable energy.
Can this profit structure last?
Smelter economics have undergone a structural shift: by-product revenue, not processing fees, now underpins profit.
Citi noted in a research report that Jiangxi Copper's strong results — especially in Q2 — were driven by the sulfuric acid rally and investment gains from its acquisition of SolGold.
The sustained slide in treatment charges is also reshaping industry negotiations: miners are gradually abandoning traditional annual benchmark pricing in favor of spot-index-linked mechanisms.
This means → the key test is when treatment charges bottom out. If sulfuric acid prices retreat at the same time, the double buffer could unwind simultaneously.
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