Copper is expected to maintain gains in 2026 as mining disruptions disrupt the fuel deficit
Analysts have raised their copper price forecasts next year after a series of mining disruptions sparked concerns about shortages and market deficits, according to a Reuters poll.
The London Metal Exchange’s copper benchmark hit its strongest point in more than 16 months in early October following news of mining problems in Indonesia, Congo and Chile.
Copper, which is used in power generation and construction and is often seen as a barometer of the global economy, has strengthened by 25% so far this year.
The LME cash copper contract (CMCU0) is expected to average $10,500 a metric ton in 2026, according to the median estimate of 30 analysts, up 7.2% from the estimate in the previous poll in July of $9,796.
“We expect copper to maintain its recent gains and maintain them through 2026 and beyond. Recent developments suggest that the refined copper market will start to tighten earlier than we previously expected,” said Matthew Sherwood of the EIU.
The world’s second-largest copper mine, Grasberg in Indonesia, halted operations last month after a mudflow flooded the site, killing seven workers.
Such incidents prompted a change in analysts’ consensus forecast to a market deficit of 124,000 tonnes in 2025 from a surplus of 40,000 tonnes in the previous poll.
They estimate the deficit will deepen in 2026 to 150,000 tonnes.
CHINESE LID ON ALUMINUM OUTPUT
The benchmark price of aluminum, which is used for transportation, construction and packaging, has risen 14% so far this year.
This is partly driven by concerns about supply as production at top producer China is close to reaching the government’s limit of 45 million tonnes per year.
“From a cost and supply perspective, a number of dynamics are likely to support aluminum prices in the medium and long term,” said Sudakshina Unnikrishnan of Standard Chartered.
“The demand outlook remains positive, especially demand from the renewable energy sector.”
LME cash aluminum (CMAL0) is forecast to average $2,679 a tonne in 2026, up 3% from estimates in the previous poll.
Analysts cut the consensus market balance surplus in 2026 to 250,000 tonnes from 281,500 tonnes in the previous poll.
INCREASING SUPPLY OF ZINC MINES
LME stockpiles of zinc, which is mostly used to galvanize steel, have fallen by 85% so far this year, but benchmark prices have remained largely flat over the same period as analysts do not view the low stockpiles as representative of the broader global market.
“We expect an increase in mine supply as the number of new mines such as Kipushi increases, which could limit prices,” said RBC’s Nana Adwoa Sereboo.
Analysts expect LME cash zinc (CMZN0) to average $2,838 a tonne in 2026, up 2.2% from the previous poll forecast.
They have increased the consensus on a global zinc surplus in 2026 to 239,000 tonnes from the previous 201,500 tonnes.
Source: Reuters
