Global copper mine production has recently been hit by a series of force majeure events. According to a research report from Minmetals Futures, Freeport's Grasberg copper mine in Indonesia suffered severe damage to mining facilities due to a mudslide accident, with copper production expected to decline by approximately 35% in 2026, representing a reduction of 270,000 tons compared to original plans. Since the beginning of this year, the Kamoa-Kakula copper mine in the Democratic Republic of Congo has reduced production by 150,000 tons due to seismic activity, while Chile's state-owned Codelco's El Teniente copper mine has also suspended operations due to a collapse accident.
Overnight, US copper concept stocks strengthened amid volatility, with Hudbay Minerals rising nearly 8%, Freeport-McMoRan and Teck Resources Limited gaining over 5%, and Southern Copper Corporation up nearly 4%. Overnight COMEX copper futures rose 2.94% to $4.9120 per pound.
On September 28, the Ministry of Industry and Information Technology and seven other departments issued the "Work Plan for Stable Growth in the Non-ferrous Metals Industry (2025-2026)," which stated that from 2025-2026, the added value of the non-ferrous metals industry should grow at an average annual rate of around 5%, with economic benefits maintaining a positive trend. The production of ten non-ferrous metals should grow at an average annual rate of around 1.5%, with positive progress in domestic resource development for copper, aluminum, lithium, and other metals. Recycled metal production should exceed 20 million tons, high-end product supply capacity should continue to strengthen, and green, low-carbon, and digital development levels should continue to improve.
Bank of America Securities released a research report stating that considering the current operational problems at the world's three major copper mines, actual production in the next two years is expected to be lower than originally anticipated. The shutdown of the Grasberg mine alone could lead to an expansion of the supply gap by 270,000 tons next year. Meanwhile, European demand is bottoming out and recovering, Chinese demand is stabilizing, and copper supply faces pressure. Accordingly, copper price forecasts for next year and 2027 have been raised to $11,313 and $13,500 per ton, respectively.
Goldman Sachs pointed out that grid upgrades and AI demand will drive continued copper price increases. A research report stated that since 2025, copper mine disruption events have occurred frequently, with most disruptions being resolved in the short term, resulting in limited supply reductions. Currently, the disruptions with greater supply impact and longer duration are the Kamoa-Kakula copper mine and Grasberg copper mine. Since September, domestic electrolytic copper social inventory has fluctuated, indicating that domestic supply and demand are in balance. The reduction of 200,000 tons of supply from the Grasberg mine in Q4 2025 is expected to help electrolytic copper destocking.
Looking ahead to 2026, the combined supply reduction from the Kamoa-Kakula copper mine and Grasberg copper mine could potentially reach 400,000 tons of production, which is expected to offset all global copper mine increments, significantly improving the copper supply-demand balance. Combined with market expectations that AI-related infrastructure rollout will drive copper demand, frequent copper mine disruptions, global fiscal and monetary easing environment, and gold prices having a certain drag effect on copper prices, it is judged that the copper price rally may be initiated. It is recommended to focus on high-quality copper mining companies.
Related Hong Kong stocks in the copper mining sector include: CMOC (03993), ZIJIN MINING (02899), China Nonferrous Mining Corporation Limited (01258), MMG (01208), Jiangxi Copper Company Limited (00358), China Railway Group Limited (00390), and others.