Chile's copper commission, Cochilco, has cut its production forecasts for the world's largest copper producer and raised its 2027 price outlook by 17% as mines struggle to recover lost output, according to a report by Henry Lazenby in The Northern Miner. Cochilco raised its average copper price forecast for 2027 to $5.95 (C$8.32) per lb from $5.10 in releases issued on Friday. The agency now expects Chilean output to fall 8.4% this year, compared with the 2.6% decline it projected in August.
Cochilco Executive Vice-President Claudia Rodríguez said in the price announcement that the global surpluses the agency projects are small and can change with operational delays or higher-than-expected consumption. The projected surplus of refined metal leaves little room for further supply disruptions. According to calculations by The Northern Miner based on Cochilco's figures, demand just 1% above next year's forecast would erase the surplus and create a deficit of about 65,000 tonnes if supply stayed unchanged.
BMO Capital Markets analysts Helen Amos and George Heppel said the downgrade could leave Chile with its weakest annual copper production in more than two decades. Cochilco raised its average price forecast for this year to $6.18 per lb from $5.95. It still expects prices to ease 3.7% next year as supply recovers, but that decline depends on mines meeting their production plans and metal reaching consumers.
Chile is now expected to produce 4.94 million tonnes of copper this year and 5.08 million tonnes next year, down from the agency's August forecasts of 5.27 million and 5.55 million tonnes, respectively. The country produced 3.63 million tonnes in the first nine months of this year, down 8.5% from a year earlier. BHP's Escondida and Spence operations, together with state-owned Codelco, accounted for 77% of the net national decline.
Cochilco points to lower ore grades, maintenance and interruptions affecting both the amount of material processed and the copper recovered. Reaching even the reduced annual forecast requires monthly production of about 434,000 tonnes in the fourth quarter, 7.6% above the average through September. Cochilco forecasts global mine production will rebound 3.4% next year to 24.08 million tonnes, after slipping 0.6% this year.
Chile and the Democratic Republic of Congo would supply about 37% of that increase, making their recovery central to Cochilco's market outlook. Even so, Chile would still produce 5.7% less copper next year than in 2025. Cochilco forecasts a refined-copper surplus of 144,000 tonnes this year, equivalent to 0.5% of consumption, widening to 215,000 tonnes next year, or 0.8%.
The agency noted that higher refining output, supported partly by intermediate stocks and recycled material, can coexist with falling mine production. The location of available metal adds to the strain. In its separate weekly market report, also released on Friday, Cochilco recorded 1.05 million tonnes across the three principal exchanges.
The U.S. exchange COMEX held almost 70% of the total, while Shanghai Futures Exchange stocks fell 18% during the week to 44,612 tonnes. China's Yangshan import premium reached $205 per tonne, while cash copper on the London Metals Exchange traded $210 per tonne above the three-month contract on Thursday. These premiums reflect the higher cost of obtaining metal for immediate delivery.
Cochilco cautioned that fewer arrivals, shipping delays and contractual supply restrictions helped draw down Chinese stocks, and that the decline therefore does not establish a broad acceleration in consumption. Demand offers less reassurance. The BMO analysts warned that AI investment is one of the few engines of industrial growth while construction and autos remain sluggish.
A material slowdown in data-centre spending would leave few alternatives to cushion the impact on demand, they said. Sources: The Northern Miner (Henry Lazenby, November 2, 2026), citing Cochilco price announcement and weekly market report, and analysts Helen Amos and George Heppel of BMO Capital Markets.
Source: northernminer.com