BEIJING/SINGAPORE (Reuters) -Chilean miner Antofagasta 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 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.