Chile's copper commission, Cochilco, has cut its production forecasts for the world's largest copper producer and raised its 2027 average price forecast by 17%, as mines struggle to recover lost output, according to Canadian Mining Journal. Cochilco raised its average copper price forecast for 2027 to $5.95 per lb (C$8.32) from $5.10, in releases issued on Friday. The agency also lifted its 2026 average price forecast to $6.18 per lb from $5.95.
Despite both upgrades, it expects the annual average price to fall 3.7%, from $6.18 in 2026 to $5.95 in 2027, as supply recovers. That decline depends on mines meeting their production plans and metal reaching consumers. In its price announcement, Cochilco Executive Vice-President Claudia Rodríguez said: “The [global] surpluses we project are small and can change with operational delays or higher-than-expected consumption.” Cochilco now expects Chilean output to fall 8.4% in 2026, compared with the 2.6% decline it projected in August.
Chile is 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 report does not explicitly state the base year against which the 8.4% decline is measured. Separately, the source states that Chile would still produce 5.7% less copper in 2027 than in 2025.
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 volume 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.
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. Canadian Mining Journal, based on calculations using Cochilco's figures, estimates that 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.
The consumption base used for this estimate is not specified in the source, and this figure is not an official Cochilco projection. 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. In its separate weekly market report, also released Friday, Cochilco recorded 1.05 million tonnes of copper stocks 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, so the decline does not establish a broad acceleration in consumption. On demand, BMO analysts warned that AI investment is one of the few engines of industrial growth, while construction and autos remain sluggish. They said a material slowdown in data-centre spending would leave few alternatives to cushion the impact on demand.
Sources: Canadian Mining Journal, citing Cochilco's price announcement and weekly market report; analysis by BMO Capital Markets analysts Helen Amos and George Heppel; quotation from Cochilco Executive Vice-President Claudia Rodríguez.
Source: canadianminingjournal.com