Global Copper Production Falls 1.1% in First Half; First Annual Decline Since 2017 Looms
Data from the International Copper Study Group (ICSG) shows a 1.1% decline in global copper production in the first half of this year—a trend that, alongside output drops at major companies such as Codelco and Freeport-McMoRan, has defied previous forecasts of supply growth and strengthened the likelihood of the first annual decline in copper production since 2017.
Global copper prices experienced new records last year thanks to trade flows and tariff discussions, and investors consistently held the view that a slowdown in mine supply would drive prices to higher levels. However, recent reports have turned this optimism into doubt.
Challenges for Major Copper Producers
Disappointing reports on the performance of the world’s top producers, including Codelco and Freeport-McMoRan, show that these companies have faced double-digit production declines. A set of deterrent factors, including declining ore grades, unexpected mining incidents, delays in development projects, and severe weather conditions, have prevented production plans from being realized.
Analysts Revise Supply Forecasts
The shift in approach by major analysis institutions indicates the depth of the crisis in the supply chain. Morgan Stanley, which had forecast a scenario of expanding mine supply at the beginning of this year, has now revised its estimate and assesses global supply as “unchanged or slightly lower.” This analytical revision has seriously raised the possibility of the first annual decline in copper production since 2017.
Concerns Over Supply-Demand Gap
This situation has created deep concerns about the global supply’s inability to meet the increasing demand of coming years. With the acceleration of electrification across various global industries, any disruption in the copper supply chain could lead to instability in the base metals market and a price surge.