Chile’s state copper commission Cochilco is very confident about the copper market – at least as far as the price level is concerned. In its latest forecast, the authority has raised its expectations for the copper price in 2025 and 2026 and now expects an average of $4.45 per pound in the coming year and $4.55 per pound in 2026. Previously, Cochilco had assumed $4.30 in each case.
These are the highest copper price estimates that Cochilco has ever published. At the same time, experts assume that the copper price will tend to rise at least until 2030 – because supply is lagging behind demand.
Cochilco: Copper Will Remain Structurally Scarce until 2030
For Cochilco market coordinator Víctor Garay, the message is clear: the global copper market is heading for a period of sustained scarcity. In his view, the combination of weak production growth and stable to rising demand will lead to a structural deficit that will support prices.
Despite the optimistic price outlook, Cochilco also points to risks. These include possible changes in import duties or trade rules, as well as an unexpected shift in demand trends – for example, in electrification or the construction sector. Such factors could temporarily dampen the copper price or cause greater fluctuations.
Overall, Cochilco expects that the base metal copper will play a central role in the energy transition and the expansion of modern infrastructure for many years to come. This suggests a robust demand base that is likely to outweigh short- to medium-term slowdowns – provided that the expansion plans for power grids, renewable energies and electromobility are implemented as announced.
Chile as a Key Producer: Copper Supply is Growing Slowly
The statements made by Cochilco carry particular weight because Chile is the largest copper producer in the world. Accordingly, the global copper price is closely linked to production development in the Andean state.
For the current year, Cochilco expects only a minimal increase in production of 0.1% to 5.51 million tons of copper. Production is not expected to grow to 5.6 million tons until 2026, which would correspond to an increase of 2.5%. For 2027, the commission sees a further increase to around 5.9 million tons.
The fact that growth is so subdued is also due to specific problems in important mines. Cochilco refers, among other things, to:
- weaker performance of the Collahuasi large-scale mine, a joint venture between Anglo American and Glencore,
- lower production at Anglo American Sur,
- as well as an accident in the flagship El Teniente mine of the state-owned Codelco, which has led to restrictions in operations.
Although other mines and projects are expected to gradually compensate for the outages at El Teniente in the coming years, the situation remains tense in the short term – and in a market that already has little room for maneuver on the supply side.
Copper Price Benefits from Scarce Mine Capacities
For the global copper market, the subdued increase in production in Chile means that additional capacities will continue to enter the market only slowly. New large-scale projects are complex, capital-intensive and often take many years from discovery to commercial production.
Against this backdrop, the scarcity in supply is supporting the copper price. Cochilco assumes that prices will remain at a high level as long as production growth does not pick up significantly faster. The estimates now presented of $4.45 per pound in 2025 and $4.55 per pound in 2026 reflect this assessment. They mark a significant distance from the long-term average prices, which have historically been significantly lower.
At the same time, the picture is not free of uncertainties. Should larger new projects come on stream faster than expected or existing mines be significantly expanded, this could ease the supply situation. On the demand side, a weaker global economy or delays in major infrastructure programs could temporarily dampen demand for copper. Cochilco apparently sees these factors as secondary at present, but expressly points out their risk.
Copper Demand Continues to Grow – but with less Momentum
On the demand side, Cochilco expects that the demand for copper will continue to increase, albeit with somewhat less momentum than in previous years. Long-term drivers are still the expansion of renewable energies, the electrification of transport and industry, and investments in power grids and digital infrastructure.
Solar and wind farms, high-voltage power lines, charging infrastructure for electric vehicles and data centers require large quantities of copper in the form of conductors, cables and components. In addition, there is the classic demand from the construction and consumer goods industries, which is more cyclical but also contributes to basic demand.
Importance of Copper Exploration is Growing
In view of the slower growth in the discovery and development of new copper deposits, the exploration for new, significant deposits is becoming increasingly important. Among other things, because the smallest companies in the industry, the explorers, can usually act much faster and more flexibly than large corporations.
At Goldinvest.de, we are closely following the development of several exciting copper explorers. These include the Australian American West Metals (WKN A3DE4Y) with its Storm copper project in Nunavut, Canada, as well as Axo Copper (WKN A416BY), which is pursuing a high-grade copper project in Mexico, and Brixton Metals (WKN A1J09P) with the huge, multi-generational Thorn project, in which industry giant BHP is involved.
