By Penny Langford
Chile’s copper commission, Cochilco, has raised its copper price forecast for 2026 to US$5.95 per pound, up from its previous estimate of US$5.55/lb, as operational disruptions and resilient demand tighten the outlook for the red metal.
The revised forecast comes as spot copper prices recently approached US$7/lb, reflecting supply concerns across several major producing regions and trade flows affected by tariff uncertainty. Cochilco’s updated projection remains below current spot levels but points to a market that is expected to stay historically elevated into next year.
RBC Capital Markets is also forecasting strong prices, although its 2026 estimate of US$5.83/lb is slightly below Cochilco’s view.
Copper forecast rises as supply risks accumulate
Cochilco attributed the increase to solid copper demand and continuing instability on the supply side. Disruptions have affected major mines and processing facilities in Indonesia, the Democratic Republic of Congo and Chile, limiting the market’s ability to respond quickly to higher consumption.
The commission highlighted delays in the return to full operations at Indonesia’s Grasberg mine and difficulties at the Kamoa-Kakula project in the DRC. In Chile, production concerns have involved Codelco, Escondida and Spence, while severe weather disrupted several operations in the country’s north.
The supply picture has also been affected by processing constraints. A boiler failure at Indonesia’s PT Smelting Gresik facility disrupted the treatment of concentrate from Grasberg, adding pressure to a market already facing concerns about mine availability and refined metal production.
Cochilco has kept its 2027 copper price forecast unchanged at US$5.10/lb, suggesting that it expects some easing in market conditions over the longer term even as near-term supply remains vulnerable.
Cochilco and RBC copper forecasts
The difference between the two forecasts is relatively narrow, but it illustrates the uncertainty surrounding the copper market. Both projections are well above the levels used in many long-term project models and reflect an expectation that demand growth will continue to test available mine and refining capacity.
| Forecast or market indicator | Copper price or volume |
|---|---|
| Cochilco 2026 forecast | US$5.95/lb |
| RBC Capital Markets 2026 forecast | US$5.83/lb |
| Cochilco previous 2026 forecast | US$5.55/lb |
| Recent spot price | Near US$7.00/lb |
| Cochilco 2027 forecast | US$5.10/lb |
| Cochilco 2026 refined copper surplus | 225,000 tonnes |
| Estimated share of global demand represented by surplus | 0.8% |
RBC said the physical market was showing signs of an increasingly severe supply squeeze, even as mining equities remained more cautious than the metal itself.
According to RBC commentary reported by Proactive Investors, spot copper rose 4.3% over the reported week to US$6.73/lb, while copper equities declined 2.6%. The London Metal Exchange spot-to-three-month spread reached a premium of approximately US$0.30/lb, its steepest level since the 2021 squeeze that prompted emergency action in exchange markets.
The spread indicates that buyers were willing to pay a premium for metal available immediately rather than for delivery at a later date. Such backwardation can signal tight nearby supply, although it can also be amplified by inventory movements, financing conditions and regional trade dislocations.
Chile’s production outlook remains a key variable
Chile remains central to the global copper outlook because it is the world’s leading mined copper producer and hosts some of the industry’s largest operations.
Cochilco expects Chilean mine production to reach 5.27 million tonnes in 2026, a decline of 2.6% from the prior year. The projection reflects weaker output at several large operations, alongside project delays and operational challenges at Codelco.
The state-owned producer has faced a difficult production environment, including setbacks at El Teniente. Cochilco expects a partial recovery at El Teniente and other Codelco divisions, as well as progress at Rajo Inca, greater stability at Quebrada Blanca and improved operating conditions at other mines.
Antofagasta Minerals has cut its production guidance to between 625,000 and 655,000 tonnes from an earlier range of 650,000 to 700,000 tonnes after storms disrupted Los Pelambres. Weather-related interruptions at Caserones and Candelaria also demonstrate how infrastructure, water availability and climate conditions can affect output even at established mines.
Cochilco expects Chilean production to recover to 5.55 million tonnes in 2027, representing a 5.2% increase from its 2026 estimate. That recovery is important to the commission’s longer-term price view, but the timing and reliability of the expected growth remain uncertain.
Global supply growth is modest against demand
Cochilco expects global mined copper production to reach 23.5 million tonnes in 2026, an increase of only 0.2% from 2025. Production is projected to rise by 3.8% in 2027 to approximately 24.5 million tonnes.
Against that supply growth, global refined copper demand is expected to reach 27.8 million tonnes in 2026, up 1.9% year over year. China is expected to account for much of the increase, with refined copper consumption forecast to rise 2.7% to 16 million tonnes.
That would give China approximately 57.6% of global refined copper demand, leaving the market particularly sensitive to changes in Chinese industrial activity, construction, manufacturing and power-sector investment.
RBC noted that China’s July unwrought copper imports fell 11.5% year over year to 425,000 tonnes, while industrial production growth slowed to 4.5% from 5.3%. Those figures introduce a counterweight to the bullish supply narrative: elevated prices may be supported by constrained availability, but weaker industrial demand could limit how far prices can rise and how long physical tightness persists.
Tariffs are reshaping copper trade flows
Copper’s price structure is also being influenced by tariff-related uncertainty and changing trade routes.
When buyers anticipate tariffs or other restrictions, they may bring forward purchases, redirect material to alternative markets or build inventories closer to end users. These actions can lift regional premiums and tighten available stocks even when global production has not changed materially.
For mining companies and processors, the result can be greater volatility between benchmark prices and realized prices. Freight costs, treatment and refining charges, port availability, sanctions exposure and destination-market rules can all influence the value of a shipment.
The DRC’s decision to restrict exports of copper and cobalt concentrates is another example of how governments are seeking to increase domestic processing and capture more value from mineral production. Such policies may encourage new smelter and refinery investment over time, but they can also create short-term disruptions in concentrate availability and alter established supply chains.
What the forecast means for operators and investors
Cochilco’s US$5.95/lb forecast does not assume that copper will remain near US$7/lb throughout 2026. Instead, it points to an expectation that prices will moderate from recent spot highs while remaining supported by tight supply and structural demand.
For operators, a sustained price above US$5/lb could improve project economics and strengthen the case for expansions, brownfield developments and mine-life extensions. It could also increase the value of reliable production from established assets, particularly where companies can limit costs and maintain consistent throughput.
The same price environment may raise pressure on permitting authorities, communities and governments to resolve bottlenecks around water, power, transport and processing capacity. Higher prices can accelerate investment, but they do not remove the technical, environmental and social constraints that limit new mine supply.
For investors and analysts, the gap between current spot prices and annual forecasts is a reminder that the market is pricing immediate scarcity while forecasters are assessing the potential for supply recovery. The key questions are whether Grasberg and Kamoa-Kakula can return to expected operating levels, how quickly Chilean output improves, and whether demand from China and energy-transition infrastructure remains strong enough to absorb new refined production.
Skillings’ previous analysis of the 2026 copper price outlook examines the wider deficit risks facing the market. The Las Bambas halt and South American supply risks provide further context on how individual disruptions can affect an already concentrated supply chain.
For now, Cochilco’s revision places its forecast above RBC’s US$5.83/lb estimate while keeping the focus on the same central issue: copper demand is growing, but the supply response remains slow, uneven and exposed to operational and geopolitical shocks.