The market was slow to pickup on the importance of the Freeport-McMoran update following the mudslide at its massive Grasberg mine but it’s quickly becoming clear.
About 70% of the mine is currently shut down and executives said next year’s production could be down 35% vs. pre-incident estimates. That will take about 1.2% of global supply offline and put the entire market into a deficit.
Two miners are dead and five miners remain missing following the 800,000 tonne mudslide and today FCX called off search efforts.
Goldman Sachs estimates the disaster has shifted its 2025 global copper balance
from a projected surplus of 105,000 tons to a deficit of 55,500 tons. For 2026, GS now sees just a small surplus.
Goldman’s commodities team has long touted the copper thesis for a persistent deficit late this decade and beyond, which is something that’s likely to be exacerbated by AI power demand, grid rebuilds, robotics and green energy demand. They have a $10,750 target for 2027 but prices could later go much higher.
Copper prices are higher again today and copper miners are surging. This is the COPX copper miner ETF, which is up 10% since last week and 4.4% today. The gains today were further boosted by better Chinese industrial profits data today.
COPX daily
