Copper Supply Squeeze Worsens as Mining Equities Lag
The copper market is facing a severe supply squeeze, with spot prices rising 4.3% to $6.73/lb over the week while mining equities fell 2.6%. The RBC Capital Markets analysis notes that the London Metal Exchange (LME) spot-to-3-month futures spread reached $0.30/lb, its steepest premium since the 2021 squeeze.
A series of disruptions have contributed to the supply shortage. PT Smelting Gresik's boiler failure in Indonesia has affected production, while Antofagasta cut its 2026 guidance due to storm-related issues at Los Pelambres. Codelco has also abandoned its plan to produce 1.34 million tonnes this year.
RBC's modelling suggests that copper prices will remain elevated in the coming years, with forecasts of $5.83/lb for 2026 and $6.00/lb from 2027-2029. The long-term assumption is a price of $5.00/lb.