Will copper prices surge to $11,700 per metric tonne due to supply issues?
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Synopsis
Copper prices are on the rise due to increasing demand and limited supply. With projections hitting $11,700 per metric tonne, we explore the underlying causes, including significant events affecting production and the future outlook for miners.
Key Takeaways
- Copper prices projected to reach $11,700 per metric tonne.
- Demand driven by electrification and renewable energy.
- Grasberg mine incident leads to significant production losses.
- Market inventories at multi-year lows.
- Miners set to benefit from higher prices.
New Delhi, Sep 26 (NationPress) The cost of copper is anticipated to escalate to $11,700 per metric tonne as the structural demand for the metal continues to rise amidst a tightening supply, according to a report released on Friday.
Following a surge of over 5 percent, copper prices experienced a slight decline of 0.32 percent due to a mudflow incident at Freeport-McMoRan’s Grasberg mine in Indonesia, recognized as the second-largest copper mine globally.
For September expiry, MCX copper futures reached Rs 950, while London Metal Exchange futures climbed to around $10,300 per metric tonne on Thursday. Traders indicated that this increase was influenced by a 3–4 percent reduction in projected global mined copper output from Grasberg, translating to over 250,000 tonnes less from the 2025 production forecast.
Experts noted that copper prices have surged nearly 20 percent this year, driven by dwindling supply and robust demand linked to the global energy transition.
Navneet Damani, Head of Commodity Research at Motilal Oswal Financial Services Ltd. (MOFSL), stated, "The price rally has been spurred by electrification, increased EV adoption, grid enhancements, renewable energy installations, and a rise in AI-driven data centers, all of which are significantly copper-dependent."
On the supply side, conditions have tightened considerably. Besides the Grasberg incident, refining bottlenecks and a lack of concentrate have further hampered the conversion of mining projects into refined copper output, Damani explained.
These factors have led to inventory levels dropping to multi-year lows, falling below the 5-year average. In the first seven months of this year, the market showed a 101,000-tonne surplus, a significant decrease from a 401,000-tonne surplus in the same period last year.
Freeport‑McMoRan has declared force majeure on copper shipments from its Grasberg mine and has indefinitely suspended block cave operations.
Additionally, China reduced its refined copper production by 5 percent in early September, impacting the market by about 500,000 tonnes.
Copper miners are set to take advantage of rising prices, with their profits projected to remain elevated for the foreseeable future, MOFSL mentioned in a recent note.
Point of View
The current surge in copper prices due to supply constraints and increasing demand highlights the critical role of this metal in our economy. As we navigate these challenges, it is essential to remain informed about market dynamics and their implications on industries reliant on copper.
NationPress
26/09/2025
Frequently Asked Questions
What is driving the increase in copper prices?
The increase in copper prices is primarily driven by a surge in demand linked to electrification, EV adoption, and renewable energy projects, along with supply constraints from significant mining incidents.
How much has copper prices increased this year?
Copper prices have risen by nearly 20 percent this year due to tightening supply and strong global demand.
What impact did the Grasberg mine incident have?
The incident at the Grasberg mine has resulted in a projected loss of over 250,000 tonnes from the 2025 production forecast, significantly impacting supply.
How are copper miners expected to fare in the future?
Copper miners are likely to benefit from the rising prices, with their profits expected to remain high in the coming months.
What other factors are affecting copper supply?
Bottlenecks in refining processes and a scarcity of concentrates are also contributing to reduced supply, further impacting market prices.
