Goldman Sachs analysts have significantly lowered their expectations for the global copper mine supply. The trigger is the disruption at the large Indonesian mine Grasberg, which was triggered on September 8 by an underground incident due to a strong mudflow. Operator Freeport-McMoRan (NYSE: FCX) then invoked “Force Majeure.” According to calculations by the investment bank, the resulting supply shortfall amounts to around 525,000 tons of copper and shifts the global market from a previously expected surplus to a deficit in 2025.
Grasberg Disruption Shifts the Global Balance in the Copper Market
Grasberg is one of the largest copper mining operations in the world. The current incident has immediate consequences for production planning: Goldman Sachs expects the mine to deliver 250,000 to 260,000 tons less copper in 2025; a further decline of 270,000 tons is estimated for 2026. Freeport-McMoRan points out that only very small quantities are initially expected in the fourth quarter of 2025. Background: Intact pit areas could – subject to progress in repair and safety – only be restarted towards the middle of the quarter. This part of the plant usually accounts for about 30–40% of Grasberg’s annual production capacity. According to the bank, referring to Freeport, the larger remainder of the mine is not expected to resume operations until the course of 2026.
This also shifts global supply assumptions. For the second half of 2025, Goldman Sachs is cutting its forecast by 160,000 tons of copper, and by a further 200,000 tons for 2026. In total, the expected outages exceed the usual disruption and downtime reserves that the firm takes into account in its models. This has consequences for the market balance – not only in Indonesia, but worldwide.
Impact on Mine Production and Forecasts
The reduction in production expectations comes in an environment in which the growth of global copper mine production is already moderate. Goldman Sachs reduces the increase for 2025 to only +0.2% compared to the previous year (previously +0.8%). For 2026, the forecast falls to +1.9% (previously +2.2%). In addition to Grasberg, these adjustments also reflect the sector’s susceptibility to operational interruptions – for example, due to geological conditions, weather events or technical changes in underground mining.
The effect is particularly evident in the global copper balance: a surplus of 105,000 tons previously assumed for 2025 will become a deficit of 55,500 tons after the adjustment. For 2026, Goldman Sachs continues to expect a slight surplus, but at a lower level than previously modeled. The shift underscores how sensitive the copper market is to production interruptions in large mines – especially where capacities are difficult to replace quickly and alternative sources do not appear to be ramped up in the short term.
In addition to Grasberg, the bank refers to further disruptions in the current year, including in Kamoa-Kakula (Democratic Republic of Congo) and El Teniente (Chile). Such events illustrate the structural challenges: deeper deposits, declining ore grades and more complex development increase the complexity of extraction. For the copper supply, this means that temporary outages are more difficult to compensate for – with corresponding effects on the project pipelines and the global production curve.
Price Outlook for LME Copper and Long-Term Factors
Against this background, Goldman Sachs sees upside risks to its own price forecast. For December 2025, the bank’s benchmark is currently at $9,700 per tonne of LME copper. In view of the updated supply situation, however, the analysts believe that the prices could settle in the range of $10,200 to $10,500. This would mean that the market would price in the expected shortage in 2025 more strongly, especially since the planned restart in Grasberg is to take place gradually and the delivery quantities are likely to remain limited in the fourth quarter.
For the longer-term horizon, Goldman Sachs reaffirms a positive trend in the copper price structure and cites $10,750 per tonne by 2027 as a guide. The drivers of this view are primarily supply-side factors: deeper mines, harder rock, lower ore grades and the associated cost and time intensity of new capacities. In addition, there are the aforementioned interruptions in large projects, which can delay the construction of additional supply. While the bank still expects a small surplus in 2026, the supply situation remains vulnerable according to the updated assumptions – a point that market participants are observing, for example, in the forward structures of the London Metal Exchange (LME) and the reactions to news from important producing regions.
For investors and industrial companies, the situation is particularly significant from a risk perspective: supply chains and purchasing plans depend heavily on the reliability of large mine sites. Events such as the incident in Grasberg show how quickly balances can tip – from a supposed surplus to a deficit within a few weeks. At the same time, it should be noted that the supply side could get some air again in 2026, depending on the course of the recommissioning in Indonesia and the progress of other projects. Market development will therefore depend largely on how quickly Freeport-McMoRan can safely ramp up the intact areas and when the remaining parts of the mine can safely produce again.
Conclusion: The event in Indonesia has significantly changed Goldman Sachs’ global copper forecasts. A deficit is now expected in 2025, and a small surplus in 2026 – each against the background of subdued mine growth rates. For LME copper, the bank sees the possibility of rising prices in the short term and confirms an increased price level in the long term, supported by structural supply factors and recent disruptions in large projects.
