The week began with the red metal closing at US$4.812 per pound. The increase appears to be driven by supply restrictions in the copper market.
By Matías Vera
This Monday (October 6, 2025), the price of copper reached its sixth historical high on the London Metal Exchange (LME). The red metal traded at US$4.812 per pound during the session, a 0.68% increase compared to Friday. This is the highest value since May 21, 2024, when copper was reported at US$4.887 per pound. The accident at the Grasberg mine in Indonesia is believed to be one of the main reasons for the price rise, due to copper supply constraints. The incident at El Teniente is also seen as another factor pushing copper prices upward.
Juan Cristóbal Ciudad, Senior Market and Industry Analyst at Plusmining, stated that “in the medium- and long-term horizon, the expected trend remains bullish, supported by solid market fundamentals: dynamic demand driven by new uses of copper and a supply with limited expansion capacity, as well as evident vulnerability to adverse events such as the recent accidents at major deposits.”
Ciudad added that “projections suggest that the daily price of copper could continue to register further increases, consistent with the tight market environment and the structural conditions of the sector.”
Reasons for the price increase
Several factors appear to be influencing this rise. One of them is the accident that occurred on September 8 at Grasberg, the world’s second-largest copper mine. The deposit is located in Indonesia and is owned 51% by a state-owned company of that government and 49% by Freeport-McMoRan, which operates the mine.
“The shutdown of the Grasberg mine in Indonesia is the main shock explaining the recent bullish bias. The accident and declaration of force majeure imply significant production losses for 2025–2026, reshaping the balance toward a deficit and generating a risk premium that was immediately reflected in the metal’s price,” stated the Chilean Copper Commission (Cochilco) in its weekly report for the previous week.
On September 8, the Freeport-McMoRan–operated mine was hit by a mudslide. The incident triggered a temporary suspension of mining operations at Grasberg. The company estimated that around 800,000 metric tons of wet material entered the Grasberg open pit, reaching various levels of the deposit.
On Sunday (October 5, 2025), Freeport-McMoRan reported that the five workers who had been missing were found deceased, bringing the total number of fatalities to seven. The company is preparing an investigation, involving external experts, to determine the causes of the accident and make recommendations to prevent future incidents. The investigation is expected to conclude by the end of this year.
In addition to Grasberg, a Chilean factor has also influenced copper prices. Cochilco noted in its weekly report that “the decline in Chilean production during August, affected by incidents at Codelco operations, added an additional supply-side risk factor.”
“Together, the depreciation of the dollar, the disruption at Grasberg, and production cuts in Chile explain the consolidation of prices near multi-month highs, despite persistent weakness in Chinese demand,” the report added.
“Good news for Chile”
Álvaro Merino, Executive Director of Núcleo Minero, told Pulso that “the restrictions in copper supply have driven up the metal’s price.”
He added that the flooding at the Kamoa-Kakula complex in the Democratic Republic of Congo last May, as well as the recent accident at El Teniente, have also affected the red metal’s price.
How much did the Grasberg accident affect copper’s price rise?
The Grasberg accident is a highly relevant factor behind the recent supply restrictions. Grasberg’s production is around 800,000 tons per year, and it is estimated that the production impact will amount to 591,000 tons less between September 2025 and the end of 2026, meaning the market impact is significant.
Will copper prices continue to rise?
That will depend on the performance of the global economy, particularly China, which currently accounts for 60% of global consumption. Additional factors include the international value of the dollar, uncertainty surrounding the U.S. fiscal situation, and upcoming interest rate decisions by the Federal Reserve.
What should be monitored in the coming days regarding the red metal’s behavior?
Attention should be paid to the international behavior of the dollar: if it depreciates, it pushes copper prices up; if it strengthens, it puts downward pressure on prices. It will also be important to monitor developments in the U.S. government shutdown and Federal Reserve Chair Jerome Powell’s remarks this Thursday, October 8.
How does the copper price increase impact Chile’s public finances?
The rise in copper prices is good news for Chile, as it contributes to greater fiscal revenue. For every one-cent increase in the average annual price of copper, the country receives an additional US$120 million in export revenue and US$60 million in extra government income from private mining taxes and Codelco’s profits.
By Monday’s market close, the IPSA recorded a 0.65% decline, reaching 8,832.48 points. The U.S. dollar traded at CLP$963 per unit on the Santiago Stock Exchange. The S&P 500 closed up 0.36%, at 6,740 points.
Source: La Tercera