The Hormuz Blind Spot Hiding in Plain Sight (Not Oil!)

Every morning, the same argument starts all over again.

Tell me, how many barrels are making it through the Strait of Hormuz?

That answer is more contested than you could ever imagine. Everyone has a number, and their own charts to prove it (nevermind the fact that often their charts conflict with each other). 

Usually, it’s the loudest voice in the room that sways oil prices, and if there’s one thing we know for certain, it’s that the fight over how much crude oil is flowing out of the Strait of Hormuz (or the Red Sea, for that matter), will continue raging for months on end. 

This week alone, tankers came under attack trying to transit the strait, a third U.S. carrier group was reportedly dispatched to the region, and Brent crude is still hovering around $100 a barrel.

Don’t get me wrong, oil is a huge deal. So, it’s understandable that the debate around it intensifies as this U.S.-Iran war drags on. 

I think it’s safe to say that we both know this is how it normally goes. 

However, when the whole world fixates on a single number, everything else slips out of view.

The headlines are flooded with oil narratives, yet plenty of other cargo depends on that waterway.

Yes, even the unglamorous cargoes out there can be just as vital to certain markets as the precious crude oil we obsess over. 

Take sulphur, for instance. Nobody cares enough to be concerned about it. Yet I’ll bet most people have no idea that at least half of the world’s seaborne sulphur trade passes through the Strait of Hormuz, much of it a byproduct of refining Gulf oil and gas.

Of course, sulphur becomes sulphuric acid.

Still trying to put two and two together? 

Well, here’s a hint…

Roughly one-fifth of the world’s copper supply relies on that acid to leach metal out of ore.

You see, the chokepoint everyone is tracking for oil is also squeezing the metal that wires our grids, and one of the most vital ingredients to the AI boom. 

And still, hardly anyone is talking about it. 

Yet, this is only part of the story. The deeper strain is showing up somewhere else, in a number most people have never heard of.

It’s a fee that has turned negative.

To understand why this is so strange, you need to know how copper gets made.

As you may know, ore is dug up and extracted from a mine and turned into concentrate. Then, a smelter buys that concentrate and turns it into refined metal.

Pretty simple, right?

In a normal market, the miner pays the smelter a processing fee for the work. It’s called a treatment and refining charge, or TC/RC.

That makes sense, since the smelter does the heavy lifting, so they get paid. 

Not anymore.

In mid-September, spot TC/RCs sank to roughly negative $226 a tonne, and the bitter truth here is that they’ve been negative for 21 months. 

Even the 2026 annual benchmark, struck between Chilean miner Antofagasta and a Chinese smelter, came in at zero. 

For the record, that’s the lowest on record.

Picture a restaurant paying the farmer for the privilege of cooking his vegetables.

That’s where smelters find themselves today.

The reason is because there just isn’t enough ore to go around.

Chile, the world’s largest producer, saw output in August fall nearly 13% to a 15-year low. Its own copper commission expects 2026 production to slip about 2.6%, to 5.3 million tonnes. 

The Congo has banned copper concentrate exports — which tightens the pool further, even though most of its copper already leaves as refined metal. 

Now, global mine supply is on track for its first annual decline since 2017.

As a result, smelters are bidding against each other for scarce feed. And it’s starting to show.

Just look at China’s top smelters, which handle more than half of the world’s smelting. Once again, they’ve declined to set their usual quarterly fee guidance and urged members to cut output. 

Meanwhile, premiums for refined copper in East China have climbed to multi-year highs while inventories sit near cyclical lows.

If enough plants slow down, a shortage that begins at the mine ends up in the refined metal.

See it now? That’s the part most people miss entirely. 

And to be fair, there are actually two choke points at work here:

• The concentrate pipeline: Mines are short of ore, so smelters are paying for feed.
• The acid pipeline: Oxide ore that skips the smelter needs acid to become metal, and much of the sulphur behind that acid comes through Hormuz.

The first squeezes the middle of the supply chain, while the second chokes off metal that never enters it. 

That’s why we saw spot acid prices in Chile roughly doubled in a matter of weeks last spring. 

That’s a real Hormuz blind spot hiding in plain sight, folks. 

Now, the other side does have a case to make.

Not only were China’s August copper imports the weakest in six years, but we also have to take into account those bets on Fed rate hikes that’re lifting the dollar and weighing on metals. 

Granted, a few experts still see a small surplus this year. 

Those are all fair points that should be part of the discussion. However, a market can be soft on demand and brittle on supply at the same time.

Trust me, that combination doesn’t stay quiet forever.

Now let’s step back and look at the whole picture, shall we?

We know that supply is under strain at both ends of the chain. After all, mines are running short of ore, and the acid that unlocks a big slice of the rest depends on a waterway under military threat.

This is taking place while demand keeps building momentum. 

Why wouldn’t it? Grids need upgrading, data centers need power, and one major projection warns that global copper demand will rise from about 28 million tonnes today to more than 42 million by 2040.

In fact, data center demand alone is expected to more than double over that stretch.

Keep in mind that this is occurring during a time when a new mine takes years to permit and build, and the ones already running are fighting aging equipment and thinner ore.

Once you see the whole field, it’s difficult not to stay bullish on copper prices over the long-term. 

All that market noise, from rate-hike scares to soft data out of China and fading tariff trades, doesn’t alter that sentiment. 

Truth is, this is a rather familiar pattern we find far too often — people get distracted by headlines over one chokepoint and completely ignore others. 

Oil may command the world’s attention (and there’s a good argument that it should!), but copper is the underlying crisis that’s hiding in plain sight. 

THAT is our opening. 

Stay tuned.

P.S. Greenland Stocks Just Exploded. These U.S. Critical Mineral Plays Could Be Next.

Three Greenland-linked stocks surged after a major security deal put strategic minerals back in the spotlight — but those companies didn’t receive new mining permits, contracts, or government funding. Now investors are turning their attention to four U.S. mineral deposits already drilled, studied, and moving toward federal support, with some tied to companies still trading under $4 a share.