BEIJING/SINGAPORE, June 27 (Reuters) - Chilean miner

Antofagasta ( ANFGF ) has agreed with some Chinese smelters to

set copper concentrate processing fees at a record low of $0 per

metric ton and $0 cent per pound, four sources with the

knowledge of the matter told Reuters on Friday.

The record low charges reflect a shortage of copper

concentrate supply and compare with the 2025 annual benchmarks

at $21.25 a ton and 2.125 cents per pound agreed between the

Chilean company and Chinese smelters.

One smelter and two analysts speaking on condition of

anonymity described it as "better than expected".

Antofagasta ( ANFGF ) did not immediately respond to a request for

comment outside of their office hours.

The zero processing fee is a win for smelters, given spot

charges are hovering around the negative $43 mark - implying

smelters would have to pay copper miners for processing their

concentrate.

Nonetheless, the contracts will deepen smelter losses in

China, the world's largest refined copper producer and consumer,

as the fees are a key source of revenue. In time the new low

could force some smelters to cut production, analysts, smelters

and traders said.

The concentrate supply shortage has intensified this year

with more new smelter capacity coming online in China.