Copper Market Shaken By Grasberg Disruption, Goldman Slashes Projections

The copper market has been jolted by disruptions at Indonesia’s Grasberg mine, with ripple effects spreading across supply forecasts and price expectations. With the mine operator declaring force majeure, Goldman Sachs slashed its mine supply outlook for 2025 and 2026, turning a projected surplus into deficit territory.“A prolonged disruption at the Grasberg mine could drive copper prices even higher, while intensifying supply challenges for smelters already facing feedstock shortages,” analysts at ING said.The September 8 incident, caused by a heavy mudflow, trapped seven workers underground, leaving two dead and five still missing. Operator Freeport-McMoRan (NYSE: FCX) declared force majeure, halting operations in one of the world’s largest copper districts. Grasberg typically accounts for around 3% of global copper production.Also Read: What Freeport’s Mud Rush Disaster Means For Its StockThe company now expects minimal fourth-quarter 2025 production, with only 30%–40% of capacity scheduled to restart by mid-quarter. The rest of the mine is unlikely to return until 2026, with production possibly 35% below earlier forecasts.Goldman Sachs estimates a total loss of 525,000 tons of copper mine supply across 2025 and 2026, according to Reuters. Its global mine production growth forecast was cut to just 0.2% for 2025 and 1.9% for 2026. The disruption flipped its 2025 copper balance from a surplus of 105,000 tons into a deficit of 55,000 tons.Goldman now sees upside risks to its December 2025 forecast of $9,700 per ton, with prices potentially hitting $10,200–$10,500. By 2027, the bank expects copper to average $10,750 per ton, supported by deeper mines, declining grades, and ongoing risks at other major projects.Freeport’s shares fell nearly 17% in the immediate aftermath, marking their steepest one-day drop since March 2020. The miner is down over 20% for the week. “It’s a big outage … which in turn has caused the copper equities to rally,” Daniel Morgan, mining equity analyst at Barrenjoey, said per Reuters.Other institutions are more cautious than Goldman. ING forecasts copper averaging $9,837 per ton ($4.46/lb) in 2026. Scotiabank projects $4.05/lb, or roughly $8,930 per ton, reflecting expectations of tempered demand. J.P. Morgan is even more restrained, forecasting $9,400/mt in Q1 2026 and $9,500/mt in Q2, warning that inventories could cap gains.The divergence in outlooks best shows the market uncertainty. Outside of long-term supply constraints, other risks include slower economic growth, regulatory risks, and smelting overcapacity in China.Still, the broader trend points to tightening supply. ING noted that unplanned disruptions affected 5.7% of global copper output in 2024 and are set to surpass 6% this year.With Grasberg offline, the fragility of supply chains has rarely been as apparent, and copper’s role in electrification ensures that even small deficits carry outsized consequences. Australian Market Struggles With Closing Top Deals Image by Siwakorn TH via Shutterstock