Mining accidents intensify copper resource tensions as institutions warn of major supply-demand gaps approaching

Cailian Press, March 10 (Editor Zhao Hao) Under the impact of mine production disruptions combined with U.S. tariff policies, the global copper metal market is facing serious supply shortages, with multiple institutions warning that the risk of shortages is approaching.

According to a January study by S&P Global, by 2040, the global copper market will face a supply gap of 10 million tons, with demand expected to surge to 42 million tons, an increase of about 50% from current levels.

Meanwhile, ING predicts that due to existing supply constraints in the market, after a 200,000-ton refined copper shortfall in 2025, the gap will expand to 600,000 tons in 2026.

Source: ING Official Website

The expected supply gap has already driven a significant rise in copper prices in 2025. U.S. copper futures prices increased by over 41% last year, marking the largest annual gain since 2009. Since the beginning of this year, copper prices have risen by nearly 2%.

Charles Cooper, Head of Copper Research at Wood Mackenzie, said: “As the economy develops, the demand for infrastructure increases; the more infrastructure there is, the more energy is needed, and more energy means higher copper consumption.”

Copper is widely used in power grids, renewable energy systems, and electric vehicles, playing a key role in the electrification transition and being regarded as a “barometer” of the global economy. Additionally, the AI boom is also boosting copper demand.

On the supply side, several commodities experts pointed out that mine supply disruptions will be the main cause of copper shortages, and their impact is expected to last for several years.

Cooper from Wood Mackenzie noted, “Last year, the industry faced multiple major challenges… The three largest copper mines in the world experienced temporary shutdowns.”

The three mines mentioned by Cooper are the Kamoa Kakula Copper Mine in Congo (DRC), the El Teniente Copper Mine in Chile, and the Grasberg Copper Mine in Indonesia.

In the first half of 2025, the Kamoa Kakula Copper Mine experienced severe flooding, leading to downward revisions of its production forecasts for 2026 and 2027;

In June last year, a tunnel collapse occurred at the El Teniente Copper Mine, which will constrain production over the next five years;

In September last year, a deadly mudslide occurred at the Grasberg Copper Mine, resulting in a 35% reduction in 2026 production estimates, with normal operations not expected to resume until 2027.

Wood Mackenzie estimates that copper mines typically experience about 5% annual production disruptions, but last year’s accident rate was significantly higher, resulting in large amounts of new capacity meant to fill supply gaps being delayed.

Additionally, new mine development cycles are very long. S&P Global states that it takes an average of 17 years from discovery to production for a new copper mine.

Furthermore, short-term copper supply tightness is also driven by concerns over U.S. tariffs. In July last year, Trump announced a 50% tariff on imported copper semi-finished products and copper-containing derivatives.

Although raw materials like copper ore and scrap copper are exempted, market concerns about potential expansion of tariffs have led to large stockpiling in the U.S.

Ewa Manthey, a commodities strategist at ING, said, “We can now see large amounts of copper inventory piling up in U.S. warehouses, but this means that supply outside the U.S. is becoming very tight, and the market has little room to absorb new supply shocks.”

Manthey added that copper materials already imported into the U.S. are unlikely to flow back into the global market, and uncertainty around tariff policies will continue to add “risk premiums” to copper prices.

(Cailian Press, Zhao Hao)