Aurubis Lifts Its 2027 Copper Premium to a Record US$347, Sources Say

Before copper becomes cable or the wiring in a car, it is usually a cathode, a flat plate of almost pure metal, and before that it is often concentrate, a grey powder of crushed and separated ore that a smelter melts and refines. Aurubis AG, which Reuters describes as Europe's biggest copper smelter, will charge its customers in Europe a record premium of US$347 a tonne over the London Metal Exchange price for copper delivered in 2027, three market sources told Reuters on October 14, 2026.

The figure comes from the market. Aurubis declined to comment, Reuters and Fastmarkets reported the same day, and Fastmarkets reported that the company said such communications are between it and its customers. A spokesperson told Reuters that Aurubis expects "a very strong demand side" in 2027 from data centres, electric vehicles and renewable energy. Both outlets put the 2026 premium at US$315 a tonne, so the reported increase is about 10 per cent.

A premium is one of the two prices that weigh most on what a smelter earns. The other, the fee a mine pays to have its concentrate processed, has fallen below zero on the spot market, according to Aurubis's own quarterly report. Side by side, the two numbers describe a copper market in which ore is the scarce thing, and Canada's large copper producers sell that ore.

A smelter is paid at both ends

A smelter's first income comes from the mine. A miner shipping concentrate is paid for the copper it contains, minus two fees: a treatment charge for each tonne of concentrate and a refining charge for each pound of copper, known together as TC/RCs. In years of plentiful concentrate, smelters can ask for high fees. When it is scarce, they compete for it by cutting them, and on the spot market this year some have accepted fees below zero, which means the smelter in effect pays the mine to process its ore.

The second income comes from the customer. A wire-rod mill or a cable maker that buys cathode pays the exchange price plus a premium, which pays for delivery and quality and for a steady supply close to the plant. Aurubis and Codelco, the Chilean state copper company, set their premiums for 2027 deliveries in Europe in October, according to market sources cited by Reuters.

Think of a tailor who is paid to alter suits and who also sells finished suits at a markup. When fewer suits come in for alteration, tailors cut the alteration fee to keep their workrooms busy, some of them to nothing. The markup on the suits they sell then pays a larger share of the rent.

On October 23, 2026, the official cash settlement for copper on the London Metal Exchange, the price for metal delivered two business days later, was US$14,415 a tonne, according to the exchange's settlement data as tabulated by Westmetall. Add the reported 2027 premium and a tonne at that price costs US$14,762. The premium is about 2.4 per cent of the metal, or roughly 15.7 US cents a pound.

The premium is small next to the price of the metal and large next to a spot processing fee that has gone to zero or below.

Aurubis buys most of its ore on long-term contracts

Aurubis runs 12 plants in seven countries, from Hamburg in Germany to Pirdop in Bulgaria and Richmond in the United States, according to its group profile. In a year it processes about 2.4 million tonnes of copper concentrate and about 1 million tonnes of recycling materials and blister copper into about 1.1 million tonnes of cathode, and it also recovers precious metals and sells sulphuric acid.

Its shares trade on Xetra and the Frankfurt Stock Exchange under the symbol NDA, with WKN 676650 and ISIN DE0006766504, according to Deutsche Börse. The company is a member of the MDAX index, according to its investor-relations page.

Its report for the nine months to June 30, 2026 describes the squeeze from the smelter's side. Demand from the world's smelters "outpaced supply on the mine side", it said, which left treatment and refining charges "in negative territory on the spot market". Its outlook expects spot charges to stay under pressure and "in noticeably negative territory".

Aurubis buys little of its concentrate that way. The report said its long-term orientation and contracts "result in only minimal activity on the spot market", and that the company was contractually supplied with concentrate "well into Q1 of the 2026/27 fiscal year", the quarter from October to December 2026.

Its results over those nine months were higher. The Custom Smelting & Products segment, which processes concentrate and makes copper products, reported operating earnings before tax of €355 million, against €342 million a year earlier, and group operating earnings before tax rose 31 per cent to €374 million.

On August 6, 2026, Aurubis said it expected full-year operating earnings before tax at the upper end of its range of €425 million to €525 million. The release attributed the nine-month result to higher metal prices, especially for precious metals, higher sulphuric acid revenue and high capacity utilisation, against a prior year that included a major scheduled maintenance shutdown at the Bulgarian site.

Why is Europe paying more in a year of surplus?

The world copper balance shows a surplus of refined metal and a shortage of ore at the same time. The International Copper Study Group, an intergovernmental organisation of copper-producing and copper-using countries, met in Lisbon on October 13 and 14, 2026. It cut its forecast for growth in world mine production in 2026 to 1.3 per cent, from 1.6 per cent in April, and it expects primary electrolytic refined output, the metal made from concentrate, to decline in 2026 "as a result of constrained availability of concentrates". It named continuing constraints at the Grasberg mine in Indonesia and at Kamoa-Kakula in the Democratic Republic of Congo.

On refined metal, the same forecast shows a surplus of about 104,000 tonnes in 2026 and 368,000 tonnes in 2027, as new smelters and refineries ramp up in Indonesia, India and the EU. The two findings describe different points in the chain. Concentrate is short worldwide, in the study group's account. Refined metal is in surplus on the global count, and it has moved unevenly between regions.

Much of that movement has been toward the United States. Aurubis's quarterly report said market participants "reacted to the anticipated introduction of US tariffs and the resulting widening price spread" between US and London copper prices, which drew cathode into the US. Reuters reported on October 14 that supply in Europe was expected to stay tight in 2027, partly for that reason. Fastmarkets reported the same day that traders were divided on the 2027 premium, with some expecting it to hold or fall because of slow demand at high LME prices.

Codelco followed on October 20, 2026, setting its 2027 premium for Europe at a record US$350 a tonne, up from US$325, two sources told Reuters. Codelco declined to comment.

The spot premium was lower. Fastmarkets' weekly assessment of the spot premium for grade A cathode delivered in Germany was US$250 to US$280 a tonne on October 6, 2026, below the annual contract figure.

Four common readings of this market, set against the documents:

Canada's producers sell the ore smelters are short of

Five large TSX-listed copper producers kept their 2026 copper guidance with their second-quarter results.

• Teck Resources (TSX: TECK.B) guided 455,000 to 530,000 tonnes in its July 22, 2026 release, including 115,000 to 135,000 tonnes from Highland Valley Copper in British Columbia.
• First Quantum Minerals (TSX: FM) kept 405,000 to 475,000 tonnes on July 28, 2026, including 30,000 to 40,000 tonnes from processing stockpiled ore at Cobre Panamá.
• Lundin Mining (TSX: LUN) reaffirmed 310,000 to 335,000 tonnes on August 5, 2026, and said Caserones in Chile would land in the lower half of its own range after a winter storm.
• Hudbay Minerals (TSX: HBM) reaffirmed 110,000 to 138,000 tonnes on July 29, 2026.
• Capstone Copper (TSX: CS) kept 200,000 to 230,000 tonnes on July 30, 2026.

Added together, each on its own reporting basis, the ranges come to about 1.48 million to 1.71 million tonnes this year. Aurubis makes about 1.1 million tonnes of cathode a year. The comparison is one of scale only: the miners' figures are copper at the mine, partly from mines they do not wholly own, and the Aurubis figure is refined metal made partly from scrap.

For a mine that sells concentrate, the processing fee is a deduction from what it is paid, so a fee falling toward zero leaves more of the copper price with the miner. In the second quarter of 2026, First Quantum reported treatment and refining charges of US$0.03 a pound, down from US$0.04 a year earlier. Hudbay's netted to a credit of US$0.01 a pound, against a cost of US$0.05 a pound in the first quarter.

Capstone said lower charges cut its second-quarter 2026 cash costs at the Mantoverde mine in Chile by US$0.06 a pound, and Teck's release described spot charges "falling to new record lows".

The copper price itself does most of the work. Teck realised US$6.09 a pound in the second quarter of 2026, close to the LME cash average of US$6.05, so its realised price tracked the exchange. At the settlement of October 23, 2026, a pound of copper was worth about US$6.54, so a three-cent deduction is less than half of one per cent of it. That settlement was about 14.7 per cent above the first of the year, US$12,571 a tonne on January 2, 2026.

The premium belongs mostly to someone else. It is earned by whoever refines the metal and delivers it to a buyer in Europe, which for a company selling concentrate is usually the smelter that bought it. My view is that the record premium matters to a Canadian miner mainly as a measure of how hard smelters can afford to compete for its ore.

Four Canadian reports come before Aurubis's annual results on December 2

The next figures arrive within three weeks. First Quantum reports third-quarter results after the Toronto close on October 28, 2026, Teck before the open on Thursday, October 29, 2026, Lundin Mining after the close on November 4, 2026 and Hudbay before the open on November 12, 2026, according to each company's notice. Each will show whether the processing lines stayed near zero through the quarter to September 30, 2026.

Teck's report comes with a labour question. Teck said on October 21, 2026 that it had received strike notice from United Steelworkers Local 7619 at Highland Valley Copper, after the collective agreement expired on September 30, 2026, and that it was committed to "a collective agreement that is fair and reasonable for employees". On October 24, 2026, Teck said strike action had commenced, that operations were continuing at reduced capacity with contingency plans in place, and that the effect on production would depend on how long the action lasts.

A US decision on copper tariffs would change where cathode goes, and Fastmarkets reported that none had been announced as of October 14, 2026. Aurubis's annual report for 2025/26, due on December 2, 2026, is the company's next scheduled publication and its first chance to describe the 2027 premium in its own words.