With strong fundamentals and record-high nominal prices, the country faces the challenge of overcoming structural fatigue in its deposits and global tensions.
By Patricia Marchetti
The copper market is going through a paradoxical moment that, all things considered, positions it as one of the strategic metals of the decade. With an average price of US$ 4.25 per pound so far in 2025, the red metal is on track to post the highest annual nominal price in history. However, the looming threat of U.S. tariffs and global geopolitical tensions pose a risk to this highly sensitive market just as it is enjoying robust fundamentals.
According to the report “Copper Market Outlook, Short-Term (2025) and Medium-Term (2026–2027)” by consulting firm Plusmining, the commodity is expected to set a record this year — it closed yesterday at US$ 4.56 in London — and continue its upward trend into 2026 and 2027, with projected prices of US$ 4.30 and US$ 4.35 per pound, driven by the energy transition, electromobility, and new technologies.
“All of these sectors support sustained annual demand growth projections of around 2.4% through 2027,” says analyst and report co-author Juan Cristóbal Ciudad. But he warns: “In the short term, copper remains highly sensitive to exogenous shocks.”
The anticipation of purchases ahead of a potential U.S. tariff — a decision expected in November — has shifted inventories from Asia to the West and widened the price gap between Comex and the London Metal Exchange. According to Ciudad, this reinforces the influence of political factors on copper prices, beyond supply and demand fundamentals.
Strong Fundamentals
According to Plusmining, copper market fundamentals are “solid.” After moving from a deficit in 2023 to a surplus in 2024, this condition is expected to persist, although gradually declining toward 2027. In fact, while in October Plusmining forecasted a 2025 deficit of 20,000 metric tons (ktCu), it has now revised that to a surplus of 59 ktCu. For 2026 and 2027, surpluses of 172 ktCu and 32 ktCu are expected, although increasing deficits are projected for 2028 and 2029 (-26 and -297 ktCu, respectively).
Global refined copper demand is forecast to grow 2.4% in 2025 — down from 2.8% in 2024 and the previously projected 2.9% — due to lower dynamism in advanced economies affected by U.S. tariff policies.
Asia will continue to lead consumption, with China accounting for nearly 70% of global demand growth this year. For the 2024–2027 period, total demand is projected to grow 7.3%, averaging 2.5% annually.
What about production? Following a 2.1% increase in 2023, global copper production is estimated to have risen 2.7% in 2024, with standout performances from the Democratic Republic of Congo (+15%) and Chile (+4.9%).
In 2025, Plusmining anticipates global copper production to grow by 2.3%, with Africa leading the way (+5.2%) and Latin America expected to grow 2%, supported by stable output in Chile and Brazil.
At the company level, nine of the world’s top 15 copper producers project output decreases totaling -257 ktCu, while six forecast increases totaling +233 ktCu. Production gains are expected from MMG (+23.6%), Teck (+17.7%), and Zijin Mining (+3.7%), while declines are projected for Anglo American (-8%), Glencore (-7.5%), and First Quantum (-5.5%).
Chile’s Challenge
“In the face of international trade tensions and an ongoing geopolitical realignment, Chile must be proactive and prepare strategically to maintain its position in the copper market,” warns Ciudad.
He emphasizes the need to diversify export destinations toward India and Southeast Asia, strengthen ties with partners such as the U.S. and Europe, and position Chilean copper as a “green” input: “That could make all the difference.”
Regarding production, he praises Codelco’s recovery — the state-owned company led copper production growth in 2024 with a 10% increase — but stresses that the “structural fatigue” of its mines could limit future performance.
“The concern is not limited to Codelco,” he adds. “Chile’s 2027 projections show a decline to 2023 levels, coupled with a stagnation in new greenfield projects between 2025 and 2027.”
With no new expansions on the horizon, Ciudad warns that the industry risks losing momentum just as global demand continues to rise. He concludes by stressing the importance of speeding up investment projects and recognizing that Chile is at a turning point:
“Chile has everything it takes to continue leading in copper, but it won’t happen by inertia. Political will, strategic vision, and execution capacity are needed. Otherwise, its leadership will erode and the challenges could slip out of reach faster than we expect.”
Source: Diario Financiero