The Chilean Copper Commission Has Raised Its Forecast For Copper Prices in 2026.

London, August 12th (Argus) - The Chilean Copper Commission (Cochilco) has raised its forecast for the average copper price in 2026 from the previous $5.55 per pound to $5.95 per pound (13,117 US dollars per tonne), citing the continued global supply constraints and strong demand. At the same time, it has lowered its expectations for Chile's copper production. The institution maintains its forecast for the 2027 copper price at $5.10 per pound. Cochilco predicts that global copper mine production will reach 23.5 million tons in 2026, increasing by only 0.2% year-on-year, as new capacity struggles to offset operational disruptions, declining ore grades, and delays in project ramp-up. Cochilco states that the slow recovery of Freeport-McMoRan's Grasberg copper mine in Indonesia, the challenges faced by Ivanhoe Mines' Kamoa-Kakula project in the Democratic Republic of Congo, and the decline in production at mines such as Codelco, Escondida, and Spence, are expected to continue to limit copper concentrate supply. This forecast adjustment comes at a time when supply in multiple stages of the copper industry is tightening. Due to the competition among smelters for limited raw copper concentrate, copper concentrate processing fees (TC) have remained in a deep negative range; meanwhile, a large amount of refined copper flowing into warehouses outside the United States has also led to a tightening of refined copper supply in regions outside the United States. Supported by the decline in exchangeable inventory and the rising concerns in the market about mining and refined copper production, LME three-month copper has recently remained above $14,000 per tonne. Cochilco predicts that global copper demand will increase by 1.9% in 2026 to 2.78 million tons, with China's consumption increasing by 2.7% to 160 million tons, accounting for 57.6% of the global total demand. Global copper demand is expected to further increase by 2.1% in 2027 to 2.845 million tons. However, as the demand for electric vehicles enters a mature stage and more scrap copper enters the market, the growth rate of China's copper consumption is expected to slow down to 1.4%. Cochilco predicts that the global refined copper market will have a 22.5-tonne surplus in 2026, equivalent to 0.8% of global consumption. But the institution points out that this does not mean there is a serious supply surplus in the market, as inventory is mainly concentrated in the United States, and the spot supply in other regions remains tight. The surplus of refined copper is expected to narrow to 17.9 tonnes in 2027, accounting for 0.6% of the global projected consumption. Chile's copper production forecast has been lowered. Cochilco predicts that Chile's copper production in 2026 will decline by 2.6% year-on-year to 5.27 million tons, due to the significant weakness of several large mines in the country in the first half of this year. In the first half of this year, Chile's copper production decreased by 6.6%, although it increased by 5.2% in June. The increase was mainly due to Escondida mine under BHP, as the base for the previous year was relatively low, and its production in June increased by 46% compared to the previous year. Cochilco predicts that Chile's copper production in the second half of 2026 will partially recover, supported by factors such as improved production at Codelco's El Teniente mine and other mines, as well as the continuous progress of the Rajo Inca project. In addition, the stable operation of Quebrada Blanca mine under Teck Resources and the return to normalcy of Mantoverde mine under Capstone Copper will provide support for production. The improvement in ore conditions and the increase in water resource supply are also beneficial for Collahuasi mine to increase production. In 2027, Chile's copper production is expected to rebound by 5.2% to 5.55 million tons, mainly benefiting from the lower comparative base in 2026 and the increased production of mines such as Codelco, Quebrada Blanca, Escondida, Collahuasi, Los Pelambres and Mantoverde. Among them, the Rajo Inca project is expected to become an important factor in driving the improvement of Codelco's production. These predictions highlight that even though copper prices are at historical highs, the release of new copper supply still faces significant challenges. Operational disruptions, declining ore grades, and project ramp-up speeds lower than expected continue to limit the ability of producers to respond quickly to strong demand.