The global copper market is going from surplus to shortage, according to the latest International Copper Study Group (ICSG) report. The 178,000-ton surplus projected for 2025 could flip to a 150,000-ton deficit as supply struggles to keep pace with demand.

“Lower than previously anticipated refined copper production will be constrained by the lower availability of copper concentrate,” ICSG noted.

The mine output is forecast to rise by 2.3% in 2026 as new capacity comes online in countries such as Mongolia and Russia. Yet the rebound won’t offset disruptions in key producers such as Chile, Indonesia, and the Democratic Republic of Congo. In addition, demand growth from Asia and the energy transition sectors will remain robust, further tightening the market.

Also Read: Why Copper’s Supply Crisis Could Deliver 20-30% Returns Through 2027

Copper’s rally, however, has been quieter than the fireworks in gold or silver. While investors have poured into precious metals amid macroeconomic turmoil, copper has been grinding higher due to supply constraints and a softer U.S. dollar.

Morgan Stanley highlighted in a note on Wednesday that a softening dollar and supply disruptions at major mines, such as Ivanhoe’s (OTC:IVPAF) Kamoa-Kakula, Codelco’s El Teniente, and Freeport-McMoRan’s Grasberg, are supporting higher prices. 

The Grasberg tragedy, which halted output and left several workers dead, sent Freeport-McMoRan ( FCX ) shares tumbling more than 15% in a single day. Analysts say these disruptions, combined with delayed mine expansions, could reduce 2026 supply forecasts by hundreds of thousands of tons. Morgan Stanley expects copper prices to average $4.83/lb in 2026, roughly in line with current levels but “well above the year-to-date average.”

Given the market dynamic, the bank has upgraded Southern Copper Corp. ( SCCO ) to Equal Weight with a $132 per share mid-2026 price target. The bank noted copper exposure and the dividend upside.

Still, promising copper mines are few and far between. After years of underinvestment, exploration budgets are at multi-decade lows, and permitting delays are lengthening project timelines. The International Energy Agency warned that without discoveries, annual copper output could fall below 20 million tons, while demand is expected to approach 33 million tons.

Although lucrative, major sector consolidations, such as the $53 billion merger between Anglo American and Teck Resources ( TECK ) , may not be the ultimate solution. The 175,000 surge in additional output by 2030 might be an exception, rather than the rule.

“Newly enlarged miners aren’t guaranteed to boost production,” consultancy Wood Mackenzie warned per Reuters, noting that companies often focus on high-return assets rather than expanding total volume.

Price Action: SCCO stock was trading higher by 2.17% to $135.40 premarket at last check Thursday. FCX was up 3.13%.

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