#copper
A smelter buys a 30% copper concentrate at a TC of $40 + 40c / lb RC. This basis the LME copper price of $9,000 per tonne. The copper content of one tonne of concentrate is 300kg. (30% of 1t). It is worth $2,700 (0.3t x 9,000 per t)

#copper
So if a smelter buys at a TC of $10, they are buying copper at a discount of $55 only. Their costs are still $200. So if they hedge forward sell when they buy the concentrate they are locking in a loss of $145.

#copper
So bringing this thread all together and explaining what it means.
1. TC's are trading at a level where smelters cannot make money.
2. This can only happen when smelters have consumed all available profitable stocks

#copper
3. Copper units have been drawn from the market in terms of metal in concentrates as smelters have maintained output by consuming their stockpiles.
4. This is totally opaque
5. This can only happen once

#copper
6. Once there is no more concentrate inventory to be consumed, only one of two things can happen:
a. All smelters produce a bit less copper
or
b. A smelter / smelters close.

Either way copper metal supply is about to drop.