Copper prices hovered near the $10,000 per ton mark on Monday as traders weighed the fallout from a major production halt at Indonesia’s Grasberg mine, one of the world’s largest copper and gold operations operated by Freeport-McMoRan ($FCX).
On the CME, three-month futures traded at $10,000 per ton ($4.61/lb), down 0.3% for the session, while on the London Metal Exchange, copper remained just below the same threshold, consolidating last week’s gains.
The stability in prices came despite confirmation that Freeport has suspended all operations at Grasberg following a mudflow incident earlier this month that trapped seven workers underground. Two of the bodies have since been recovered, with search and rescue operations ongoing. The company said production will remain halted until safety conditions allow a restart.
Supply Concerns Mount
Grasberg ranks as the world’s second-largest copper producer, and its closure has reignited concerns over global supply at a time when inventories remain tight and new capacity additions are lagging. Analysts warn that an extended suspension could quickly shift the market from balance into deficit.
The shutdown follows years of declining ore grades and rising operational risks across major copper-producing regions, from Chile to the Democratic Republic of Congo. Combined with strong demand from grid upgrades, EV production, and AI data centers, the supply gap has kept prices resilient even amid global economic uncertainty.
Market Outlook
Citigroup reiterated last week that while prices could finish 2025 in a consolidation range, a more sustained rally could emerge in 2026, potentially driving copper to $12,000 per ton in its base case. Goldman Sachs, in a separate note, warned that the Grasberg outage could erase more than 500,000 tons of mine supply across 2025–2026, shifting its 2025 global forecast from a surplus to a deficit.
Takeaway
With Grasberg’s output offline and no near-term substitute capacity, the copper market remains on alert for potential supply shocks. For institutional investors, the near-term pause in prices may reflect temporary positioning—but structurally, the risk bias continues to tilt upward as production disruptions compound long-term demand growth.
