Copper held steady on Tuesday as the prospect of further mine disruptions in Chile helped offset concerns that mounting macroeconomic headwinds could weaken demand.
Benchmark three-month copper on the London Metal Exchange (LME) rose 0.2% to US$14,447 ($20,731) per tonne during official open-outcry trading.
The metal had fallen as much as 1.4% on Monday to its lowest level since 17 September after weaker industrial profit data from China weighed on sentiment.
Despite signs of slowing economic growth and pressure from the US-Iran conflict and elevated oil prices, analysts continue to see upside for copper as available inventories tighten.
“The global market has been starved of inventory,” Panmure Liberum analyst Tom Price tells Reuters, pointing to the continued movement of copper into the US.
LME inventories have fallen to around 251,000 tonnes, their lowest in two weeks, with only about half of that metal available to the market.
Meanwhile, COMEX inventories in the US have risen for six consecutive days to more than 700,000 tonnes for the first time, as traders position for the possibility of tariffs on refined copper imports as they have done in recent months.
In China, the Yangshan import premium — a closely watched gauge of physical demand — remains near its highest level since 2022, despite softer activity ahead of the National Day holiday.
Deutsche Bank sees copper prices potentially rising by more than 50% to above US$22,000 a tonne within the next six months as buyers compete for shrinking stocks of available metal.
Copper has gained nearly 20% this year, including around 9% in September, after reaching record highs earlier in the month.
Supply disruptions mount
Sprott analyst Jacob White previously noted that copper’s rally began more than a year ago and has been driven in part by supply risks that continue to be exacerbated by new disruptions.
In Chile, workers at Antofagasta‘s (LSE:ANTO) Centinela mine recently rejected the company’s final wage offer, raising the prospect of strike action.
At BHP‘s (ASX:BHP) Escondida mine, the world’s largest copper operation, efforts to delay labour negotiations have also encountered difficulties following a fatal accident last week.
Sprott previously warned that the market has little room to accommodate additional supply disappointments this year.
The latest developments only add to existing concerns about the copper market’s ability to absorb further disruptions.
‘Big shortfall’ coming
The Financial Times reported last week that analysts now expect a ‘big shortfall’ to emerge as early as next year if disruptions persist.
UBS sees the copper deficit to reach 379,000 tonnes for that period, representing a 73% increase from its estimated deficit for 2026.
S&P Global has also projected that global copper production could peak around the end of the decade without significant additions to supply.
The outlook has increased pressure on the industry to accelerate both mine development and exploration to help meet longer-term demand.
Sprott sees copper miners as offering the clearest exposure to the market, extending beyond major producers such as BHP. Junior copper miners led the sector with a 20.76% gain in August, the firm said in its research note.
Against this backdrop, explorers are seeking to advance new copper projects as the industry looks for additional sources of supply.
BHP-partnered alliance
Kobrea Exploration (CSE:KBX) recently partnered with BHP as part of its efforts to accelerate exploration at the Western Malargüe Copper Projects in Argentina.
The companies signed an alliance agreement in August covering the district-scale project, where Kobrea says it has “identified numerous compelling porphyry copper targets”.
Under the agreement, BHP is expected to fund US$5 million in project generation over two years. The mining giant can then acquire a 75% interest in a project by spending US$40 million in exploration over eight years.
“This alliance with BHP Metals Exploration represents a transformational milestone for Kobrea and demonstrates confidence in the Western Malargüe Copper Projects,” Kobrea CEO James Hedalen commented at the time.
The projects are located in Argentina’s Mendoza province, where regulatory reforms under Governor Alfredo Cornejo have sought to encourage new copper development.
In December, the province approved a US$559 million mine being developed by a joint venture between Switzerland’s Zonda Metals and Argentine company Alberdi Energy.
Canadian porphyry exploration
Elsewhere, Canada One Mining (TSX-V:CONE) is testing porphyry copper potential in British Columbia’s lower Quesnel Trough.
Its flagship Copper Dome Project is located next to Hudbay Minerals‘ (TSX:HBM) Copper Mountain mine, one of the province’s major copper operations.
Citing company information, Copper Mountain holds 367 million tonnes of mineral reserves grading 0.25% copper and is expected to support mining through 2040 following a planned expansion.
Canada One says multiple mineralised zones have been identified across Copper Dome, with historical drilling encountering copper mineralisation associated with northeast-trending structures similar to those hosting mineralisation at Copper Mountain.
This summer, the company completed the first phase of its exploration program at Copper Dome, which it says “is key to guiding our systematic, multi-phase field programs”.
Botswana copper belt
Leviathan Metals (TSX-V:LVX) is also testing ground near an established copper operation through diamond drilling at its Central Project in Botswana.
The project directly adjoins MMG‘s (HKG:1208) Khoemacau property, which hosts a large, long-life copper mine currently undergoing an expansion.
According to Leviathan, its property encompasses the southern end of a corridor hosting some of the largest and highest-grade known copper deposits within the Kalahari Copper Belt.
The roughly 800km belt hosts significant copper-silver deposits of the sediment-hosted stratiform copper type.
Leviathan says the US Geological Survey regards the region as “one of the world’s most prospective areas for yet-to-be-discovered sediment-hosted copper deposits”.
With available inventories tightening and existing mines facing disruption risks, the pressure to advance new copper discoveries is becoming increasingly important as the market prepares for a widening supply gap.
Write to Jackson Chen at Mining.com.au
Main Image: Antofagasta PLC
