Chile Raises Copper Price Forecasts Amid Supply Constraints and Improved Trade Outlook

Chile, the world’s largest copper producer, has raised its price projections for the metal for both this year and next, citing easing trade tensions and global supply disruptions that point to a looming market deficit.

According to a report released Wednesday by the Chilean Copper Commission (Cochilco), copper prices are now expected to average $4.30 per pound in 2025 and 2026. This marks an upward revision from the previous forecast of $4.25 for both years.

The updated quarterly forecast had been delayed to allow more time for analysis following recent volatility in copper markets. U.S. copper futures, currently trading just below $4.70 per pound, surged to a record high of over $5.20 in late March amid a rush to stockpile supplies ahead of anticipated tariffs.

However, prices quickly retreated to below $4.20 two weeks later as the Trump administration announced a new wave of trade levies.

With the U.S. and China entering a 90-day tariff truce, the global trade outlook has somewhat improved, Cochilco noted. The commission now expects global copper demand to grow by 2.3% in 2025.

On the supply side, the outlook has dimmed. Global copper production is now forecast to increase by just 1.3% this year, a sharp drop from the previous estimate of 4.7%. Major producers including Freeport-McMoRan, Glencore, and Anglo American all reported production declines in the first quarter of 2025.

Chile itself, which contributes roughly a quarter of the world’s mined copper, is also underperforming. Cochilco now expects the country’s annual copper output to grow by only 3% in both 2025 and 2026 — a slower pace than earlier projections.

According to a separate report from Jefferies, global copper mine output in the most recent quarter was flat compared to a year earlier, but down 11.5% from the previous quarter due to seasonal factors.

Analysts, including Christopher LaFemina, warned that supply growth is likely to remain constrained due to declining ore quality.

“There is a risk of further demand volatility in the near term due to cyclical factors,” the Jefferies note stated.

“However, we remain bullish on copper over the medium term, driven by growing global demand and significant supply constraints.”