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Informist, Thursday, Oct. 9, 2025

 

MUMBAI – Even as persisting fears of a supply deficit in copper after disruptions at major mines across the globe have created short-term volatility in the red metal's market in the last few weeks, experts believe the copper market will remain bullish in the medium to long term as well. With many countries moving towards green energy, demand for copper will remain up, thus leading to a bullish scenario for the global copper market, experts said. In fact, the prevalent view in the market is that a bull phase in base metals, led by copper, has just begun.

 

Copper futures on the Multi Commodity Exchange of India surged past the INR 1,000-per-kilogram mark for the first time earlier this week and hit a fresh record high of INR 1,015.05 per kg Thursday, while contracts on the London Metal Exchange have risen past the $10,000-per-tonne mark. The red metal had hit an all-time high of $10,935 per tonne on May 20, 2024.

 

In the past few weeks, major mining companies have faced disruptions in their operations. Mining giant Freeport-McMoran has declared force majeure on contracted supplies from its Grasberg mine in Indonesia and suspended operations after a large flow of wet material blocked access to parts of the underground mine on Sept. 8, restricting evacuation routes for workers. Freeport-McMoran has indicated that production at Grasberg, the world's second-largest copper mine, is unlikely to resume fully until early 2027, prompting a 35% cut to its sales guidance for next year, according to analysts. In addition, political protests in Peru had forced Hudbay Minerals to temporarily halt operations at its Constancia mine.

 

In Chile, one of the leading producers of the red metal, output fell around 10% in August after a deadly accident at the state-owned mining company Codelco's flagship mine, El Teniente. Resuming full production at the mine could take longer than originally planned and the fall in output will likely exceed the 33,000 tonnes forecast by the company in August.

 

Canadian miner Teck Resources Ltd. has lowered its production forecast for the Quebrada Blanca mine in Chile to 170,000-190,000 tonnes for this year from its previous estimate of 210,000-230,000 tonnes. It has also lowered its annual production targets for the next three years.

 

"Supply risks remain significant after the mudslide at Freeport-McMoRan's Grasberg mine in Indonesia, along with setbacks in Chile and the DRC (Democratic Republic of Congo), creating a projected 400,000-tonne deficit in 2025," Riya Singh, research analyst, commodities and currency at Emkay Global Financial Services, said. "Copper remains well-supported, with LME levels around $10,654–$10,715 reflecting ongoing supply disruptions. Near-term volatility could persist due to trade tensions, tariff uncertainties, and muted US consumption." 

 

The International Copper Study Group, in its latest forecast released Wednesday, expects the global copper market to swing to a deficit in 2026 from a surplus this year due to slower growth in production. The group now expects a deficit of around 150,000 tonnes in 2026 from its earlier projection of a surplus of 209,000 tonnes. For 2025, it has revised down the expected surplus to 178,000 tonnes from 289,000 tonnes. In the first seven months of the year, the surplus in the global refined copper market narrowed to 101,000 tonnes from 401,000 tonnes in the corresponding period last year, according to the group.

 

The $10,500-$10,700 per tonne range serves as the key consolidation zone for now, Singh said. At 1439 IST, the three-month copper contract on LME was 1.9% higher at $10,875 per tonne.

 

Manoj Jain, director of Prithvi Finmart, sees immediate support for copper prices at $10,480-$10,000 per tonne on the LME and at INR 978-INR 938 per kg on the domestic bourse. Prices may rise up to $10,870 per tonne and INR 1,040 per kg in the short term, while in the long term, Jain expects prices to touch $11,400 per tonne and INR 1,120 per kg.

 

Jain added that economic data from the European Union has been better than expected in the last one or two months, which is also supporting prices of the red metal. Although China's manufacturing activity and copper imports have shown signs of moderation, Emkay's Singh said strategic investments in green technologies are boosting copper demand in the country. Electric vehicles, renewable energy systems, and artificial intelligence-driven data centres, all require significant copper inputs, with electric vehicle batteries and motors consuming nearly three times more copper than conventional vehicles, she added.

 

Meanwhile, brokerage Kedia Advisory said the recent rally in copper is just the beginning and in the next two years, base metals are likely to record 20-25% gains, with copper and zinc leading the move. It pointed to a three-stage pattern which typically governs how cycles reactivate after major economic shocks. The first phase was energy, where crude oil prices spiked to $113 per barrel during COVID-19 while natural gas tested $10 per million British thermal units. "This surge reflected heightened demand recovery, supply dislocations, and inflationary pressures rippling across global markets," the brokerage said.

 

The second phase has played out in the precious metals sector, with gold, silver, and platinum all gaining substantially since August 2022. "Now, the third and slowest-responding phase of the commodity cycle appears to be underway, led by base metals. Copper's new all-time high is widely interpreted as the opening chapter of this stage," the brokerage said. Unlike the speculative surges seen in gold and silver, base metal rallies are often grounded in fundamental industrial demand, making them particularly significant for long-term investors, it added.  End

 

US$1 = INR 88.78

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Tanima Banerjee

 

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