Goldman Sachs has reduced its global copper supply forecast for 2025 and 2026 following a production halt at Indonesia’s Grasberg mine, one of the world’s largest copper and gold operations, run by Freeport-McMoRan ($FCX).
The bank now expects global copper mine output to grow by only 0.2% in 2025, down from its prior 0.8% estimate, after a mudflow incident on September 8 forced Freeport to declare force majeure and suspend production. Grasberg’s annual output is expected to fall by roughly 250,000–260,000 tons in 2025 and 270,000 tons in 2026, resulting in a total supply loss of more than half a million tons across both years.
Freeport said operations could restart gradually in the first half of 2026, but the impact has already shifted Goldman’s 2025 global copper balance from a projected 105,000-ton surplus to a 55,000-ton deficit.
Market Implications
Goldman Sachs now sees upside risk to its December 2025 LME copper price forecast of $9,700 per ton, suggesting a potential trading range between $10,200 and $10,500 in the coming months. The bank reaffirmed its long-term bullish target of $10,750 by 2027, citing structural undersupply amid rising electrification demand.
Rival Citi also revised its short-term outlook, lifting its 0–3 month and Q4 forecasts to $10,500 per ton and projecting prices could reach $12,000 within 12 months under its base scenario—or $14,000 in a bull-case rally. Citi now expects a 400-kiloton market deficit in 2026.
Broader Context
The disruption underscores how fragile the copper supply chain has become as major producers face aging mines, higher costs, and weather-related risks. According to the International Energy Agency, demand from renewable power grids, EV infrastructure, and AI-driven data centers is set to double copper consumption by 2035, while new large-scale projects remain scarce.
For North American developers such as Power Metallic Mines ($PNPN), advancing high-grade discoveries in stable jurisdictions, the tightening supply environment continues to highlight the strategic value of domestic production pipelines.
Takeaway
With Grasberg offline and no immediate replacement capacity, the copper market is again facing a supply-driven squeeze that could accelerate the next leg of the commodities supercycle. For investors, the recalibration by major banks like Goldman and Citi reinforces the view that copper remains one of the few industrial metals with both short-term scarcity and long-term structural upside.
