China copper smelters chase ‘fool’s gold’ in hunt for more sulphuric acid profits

Reuters | June 12, 2026 | 

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Chinese copper smelters are buying more feedstock that contains little copper but lots of sulphur to cash in on lucrative margins from sulphuric acid sales that have helped counter losses from tumbling processing fees, industry sources and analysts said.

At least six smelters in China, the world’s largest refined copper producer, including Jinchuan Group, have stepped up purchases of pyrite this year, said multiple sources with knowledge of the matter.

Pyrite, also known as “fool’s gold” due to its shiny, yellow appearance similar to real gold, is a sulphur-rich mineral usually contained at low levels in the concentrate smelting process.

Once an unimportant byproduct of copper smelting, sulphuric acid has soared in price more than 500% in three years, underpinned by tighter supply due to the Russia-Ukraine war and growing demand for electric-vehicle batteries.

Iran war fuels price rally

Smelters are now opting to process more pyrite to capitalize on a price rally fuelled by the Iran war, which has disrupted shipments from the Gulf, which typically supplies about half of the world’s seaborne sulphur.

The 1,500 yuan ($222) per metric ton profit estimated by consultancy Oilchem from a ton of sulphuric acid offsets the loss incurred when processing a ton of concentrate bought on the spot market, which was running at about $115 last week, according to data from Argus.

This new strategy, which also gives smelters something to feed their furnaces while concentrate is in acutely short supply and avoids expensive shutdowns, underscores how the increasing reliance on acid profits is changing copper markets amid a prolonged downturn in processing fees, traditionally a key source of revenue for smelters.

“Years ago, it (buying pyrite) was a rare thing. But from 2026, more and more smelters are doing this … only acid is profitable now,” said a manager at a Chinese copper smelter on condition of anonymity because they and the other sources were not authorized to speak to media.

China’s imports of unroasted pyrite jumped 13.5% year-on-year in January to April to 391,916 metric tons, the highest total for the first four months of a year since 2014, according to data from Trade Data Monitor.

The volume is far below the 9.9 million tons of copper concentrate bought between January and April, but concentrate imports were down 0.8% versus last year and the pace of refined copper output growth slowed in April.

Analysts say accelerating use of pyrite could mean less concentrate consumption and less copper output.

Some smelters, however, say they are unable to process complex raw materials and are thus sitting out the race to secure pyrite.

Diversification away from copper concentrate is also being hampered by technological constraints, but Chinese smelters have been making investments that allow them to feed in more pyrite and gold concentrate, said a trader at an international trading house.

($1 = 6.7630 Chinese yuan)

(By Amy Lv, Tom Daly and Lewis Jackson; Editing by Lewis Jackson and Jamie Freed)