Macquarie on copper price rally: surplus outlook and project signals for mine planners
Reviewed by Joe Ashwell
First reported on MINING.com
30 Second Briefing
Copper trading around $6.27/lb (just over $13,800/t) is, in Macquarie Strategy’s view, running ahead of fundamentals, with visible stocks up more than 870,000 t since early 2025 and LME inventories at eight-year highs plus an estimated 550,000 t off-exchange in the US. The bank now sees a 262,000 t surplus in 2026 and surpluses above 700,000 t/y in 2027–28, even after allowing for disruptions at Kamoa-Kakula, Grasberg and a delayed Cobre Panama restart to Q2 2027. Macquarie has lifted its 2026 price forecast to $13,165/t but expects a correction towards an $11,000/t floor by Q3 2027.
Technical Brief
- US Commerce Department is considering tariffs up to 50% on a wider range of downstream copper products.
- CME–LME arbitrage is pulling metal into the US, distorting regional availability and apparent tightness.
- Chinese buyers have reduced spot activity at current prices, despite a seasonal stock build and lower imports.
- Outside China, spot premiums sit well below annual contract levels, signalling weak immediate physical demand.
- Guidance from the 17 largest copper miners has been cut by 199,000 t to 13.8 Mt for 2026.
- Kamoa-Kakula’s 2026 guidance remains 290,000–330,000 t after May 2025 flooding derailed >500,000 t expectations.
- Grasberg’s copper output is now planned to return to full production only by end-2027 after the mud rush.
- Cobre Panama restart is assumed Q2 2027 with a six‑month ramp to 385,000 t/y nameplate capacity.
Our Take
Macquarie’s caution on the current copper rally contrasts with its later March 27 note in our database describing copper as “overpriced, oversupplied and over the pond”, signalling that its house view has hardened as visible inventories have built while demand growth forecasts for China (1.1% in 2026) remain muted.
The forecast convergence of mine supply growth and demand growth at around 2.8% per year from 2025–2030 implies that new large-scale projects like Kamoa-Kakula and Grasberg expansions will mainly determine whether the market tips into surplus or deficit, putting execution and ramp-up risk at these assets in sharper focus for traders on COMEX and the LME.
Compared with other copper pieces in our coverage that emphasise US tariff risk, this article’s emphasis on modest global demand growth (1.8–2.2% through 2027) suggests that policy moves alone are unlikely to justify prices above the recent $6.27/lb level without a clear supply shock such as prolonged disruption at Cobre Panama or Zambian smelting capacity like Kansanshi.
Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.
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