Peru's Copper Push Arrives Too Late for Current Shortage

Peru's copper production targets are unlikely to alleviate the current shortage, which is expected to persist until new supply arrives. The government has announced plans to remove 27 permit requirements and increase annual output by approximately 1 million tonnes between 2031-2032.

The International Copper Study Group (ICSG) forecast a concentrate deficit of about 530,000 tonnes in 2026, with prices currently experiencing backwardation. This means that metal for immediate delivery is more expensive than metal for later delivery, indicating short nearby supply.

Peru's Minister of Energy and Mines, Guillermo Shinno, attributed the country's output decline to declining ore grades and social conflict, which will hold production below its 2025 record. The government has identified projects with signed community agreements and completed environmental studies as those positioned to benefit from the reform.

Developers that clear these hurdles are attractive to Chinese and US buyers, who see long-term value in their projects. The IEA's projected 25% copper supply deficit for 2035 contributes to this valuation.