Freeport-McMoRan Inc. is selling unexpectedly large volumes of copper ore following an outage at a plant it owns in Indonesia, bringing short-term relief to smelters who’ve faced a historic squeeze on supply.

The move by the US miner follows an incident affecting the oxygen plant at its PT Smelting facility, according to people with direct knowledge of the matter. That’s led to an extension of an ongoing four-week maintenance shutdown at the plant, which is fed by Freeport’s flagship Grasberg copper-gold mine.

The shutdown has freed up as much as 100,000 tons of semi-processed ores known as concentrate from Grasberg, said the people, who asked not to be identified due to the commercially sensitive nature of the matter. Freeport is looking to ship the cargoes quickly because it plans to export them under a short-term license that expires in mid-September, they said.

“They’re being offered to the market very abruptly,” said Albert Mackenzie, a copper analyst at Benchmark Mineral Intelligence. “Most of the smelters are fairly well spoken for in terms of the units they need for the coming months, so I think that’s part of the reason why it’s had such a jarring effect.”

A spokesperson for Freeport-McMoRan did not respond to a request for a comment regarding the planned sales. A spokesperson for the company’s Indonesian unit said it expects to complete repairs on the oxygen plant in early September.

While the volumes are small relative to the global copper market, they offer a meaningful short-term boost to spot supply for smelters who’ve been battling to obtain raw materials after a surge in global processing capacity.

Mine supply hasn’t been able to keep pace with smelting expansions in China and elsewhere, creating a worldwide shortage of ore that’s been aggravated by growing demand from traders. As the squeeze has worsened, plants have had to accept sharp cuts to processing fees in their supply deals.

Those treatment and refining charges, known as TC/RCs, are usually deducted from the cost of ores, and typically they account for about a third of a smelter’s income. But throughout 2025 they’ve been trading at negative levels in the spot market, creating an unprecedented market dynamic where smelters are now getting charged to process concentrates, rather than being paid to do so.

An index tracking spot TC/RCs stood at -$60.10 per ton of ore processed and -6.01 cents per pound of contained metal on August 8, according to Fastmarkets Ltd. The sale of the Freeport cargoes has helped lift the fees from record lows of -$66.50/66.5 cents seen in late June, the pricing provider said in a report last week.

While the rebound is modest, it could put pressure on traders who have been bidding aggressively alongside smelters to secure cargoes as the market tightened.

Nervousness about the recent improvement in spot supply is heightened because it comes at a time of weakening seasonal demand. Some market participants are bracing for a more material increase in TC/RCs in the weeks ahead.

Multiple buyers in China have received offers for Grasberg cargoes shipping in August and September with a treatment charge between -$20-$30 a ton, some of the people said.

To be sure, many analysts and traders expect the copper concentrates market to face long-term supply constraints that are likely to keep TC/RCs depressed.

“New smelter capacity coming online will likely maintain structural pressure on TCs,” said Charles Cooper, head of copper research at Wood Mackenzie. “Spot copper-concentrate treatment charges may not have reached their floor yet.”

(By Julian Luk, Alfred Cang and Jack Ryan)