The global copper market has endured a turbulent year, as a series of accidents and shutdowns disrupted supply chains around the world. On September 8, approximately 800,000 tons of wet material flooded multiple levels of the Grasberg Block Cave mine in Papua, Indonesia, forcing a suspension of all underground operations.

The incident marked the latest in a string of disruptions that have hit copper production throughout 2025.

Reports indicate that the flooding reached the level under development, killing two workers. Following the accident, Freeport-McMoRan Inc. declared force majeure, citing its inability to meet contractual obligations due to a natural disaster or circumstances beyond its control.

Grasberg is the world’s second-largest copper mine, contributing over 3% of global supply. The shutdown is expected to negatively impact copper and gold sales in Q4 this year and constrain supply through 2026.

Previous projections estimated output of around 1.7 billion pounds of copper and 1.6 million ounces of gold, but the company has now cut its 2026 production outlook by 35%. Operations are not expected to return to normal levels until 2027, with gradual restarts planned next year.

Copper supply disruptions in 2025

The Grasberg incident adds to a series of setbacks that have hit the copper industry this year, including:

• A tunnel collapse at Codelco’s El Teniente mine in Chile.

• Flooding at Ivanhoe’s Kakula mine in the Democratic Republic of Congo.

• Operational issues at Teck Resources and Anglo American.

Between July 31 and August 1, an earthquake-triggered tunnel collapse killed six workers and halted all underground operations at El Teniente.

Codelco, Chile’s state-owned mining company, suspended all extraction activities and placed its Caletones smelter on maintenance after running out of feedstock.

El Teniente is one of the world’s largest copper producers, with annual output of roughly 400,000 metric tons, making it a cornerstone of the global market.

Grasberg impact likely to extend through 2027

Even before the Grasberg accident, analysts estimated that roughly 497,000 tons of copper production had been lost to mining disruptions by the end of August.

With the addition of Grasberg’s lost output, the global supply outlook for copper has turned considerably darker.

According to Reuters, citing Benchmark Mineral Intelligence, roughly 600,000 tons of refined copper could be lost between September 8 and the end of 2026 due to this disruption alone.

The event represents a pivotal shift in global copper supply dynamics and comes at a critical time, as demand for the metal surges thanks to its key role in electronics, renewable energy infrastructure, and data centers.

With repeated disruptions among major producers, the crisis highlights the fragility of mining infrastructure and the urgent need for investment in safety, automation, and resilient supply chains.

Analysts believe the effects of these disruptions will persist not only through 2026 but also into 2027.

Price and trade effects following the Grasberg shutdown

The world’s top 20 copper mines are expected to supply around 36% of global production in 2025, yet most face challenges ranging from geological constraints to operational and social pressures.

Benchmark Mineral Intelligence (BMI) sharply raised its forecast for the 2026 copper supply deficit from just 72,000 tons to about 400,000 tons. Citi offered a similar outlook, warning of an additional 350,000-ton shortfall in 2027 unless copper prices rise enough to spur new investment.

Goldman Sachs also revised its forecasts for copper prices and production for 2025–2026, estimating output losses of about 260,000 tons in 2025 and 270,000 in 2026 at Grasberg.

In total, Goldman expects around 525,000 tons of lost copper supply, prompting the bank to cut its global production forecast by 160,000 tons for H2 2025 and 200,000 tons for 2026.

Following the September 8 accident, copper futures jumped to $10,485 per ton — the highest level in 15 months.

Prices had seen a similar spike after the El Teniente shutdown, climbing 12% to $9,707.50 per ton.

Federal Reserve Chair Jerome Powell said Tuesday that the U.S. labor market remains in a state of stagnation, marked by low hiring and firing rates through September, though the broader economy “may be on a somewhat stronger path than previously expected.”

Powell noted that policymakers will take a “meeting-by-meeting” approach to any further interest rate cuts, as they try to balance a soft labor market with inflation that remains above the 2% target.

In prepared remarks delivered at the National Association for Business Economics (NABE) conference, Powell said: “Based on the data available to us, the outlook for employment and inflation has not changed much since the September meeting four weeks ago, during which the Fed cut the benchmark rate by a quarter percentage point.”

He added that data available before the government shutdown indicated economic activity “may be running somewhat stronger than expected.”

No risk-free path

Powell emphasized that “there is no risk-free path for monetary policy” as the Fed seeks to balance its dual mandate of maximum employment and price stability. He noted a nearly even split among policymakers on when the next rate cut should occur—either later this month or in December—and among those who believe one more cut, or none, would be sufficient before year-end.

He cautioned that these expectations could shift as new data emerge, saying: “I would reiterate that these projections should be understood as a set of possible outcomes whose probabilities change as new information comes in, guiding our decision-making from meeting to meeting. We will set policy based on the evolving economic outlook and the balance of risks, not on any pre-set course.”

Labor market stagnation despite lack of official data

Although the September jobs report was delayed due to the government shutdown, Powell—who devoted much of his speech to discussing the Fed’s balance sheet policy—said he relied on a combination of public and private data to form a clearer picture of the labor market.

“While official employment data for September have been delayed, the evidence we have suggests that both layoffs and hiring remain low, and that households’ perceptions of job availability, as well as firms’ perceptions of hiring difficulty, continue to decline,” Powell said.

Tariffs driving inflation higher

Powell also noted that elevated inflation partly reflects higher prices for goods affected by tariffs, rather than broad-based inflationary pressures in the economy.

The Fed is set to receive updated inflation data on October 24, after the Bureau of Labor Statistics was instructed to release the Consumer Price Index (CPI) report on schedule despite the ongoing shutdown.

Next Fed meeting at the end of October

The Federal Reserve’s next policy meeting is scheduled for October 28–29, with markets widely expecting another quarter-point rate cut.

US stocks fell on Tuesday as renewed concerns over a trade war between the United States and China weighed on investor sentiment.

China announced new sanctions against five US companies affiliated with South Korean shipbuilder Hanwha Ocean, saying the move was aimed at protecting national security.

The decision came after President Donald Trump threatened to impose 100% tariffs on Chinese goods starting in early November in response to China tightening export restrictions on rare earth minerals.

Later today, Federal Reserve Chair Jerome Powell is expected to deliver a speech at the annual meeting of the National Association for Business Economics.

As of 16:13 GMT, the Dow Jones Industrial Average fell 0.1% (or 45 points) to 46,022, while the broader S&P 500 declined 0.4% (or 29 points) to 6,625. The Nasdaq Composite dropped 0.99% (or 224 points) to 22,469.

Nickel prices fell on Tuesday as a major U.S. bank issued a downbeat forecast for industrial metals next year.

In a research note published Friday, Goldman Sachs said copper prices are expected to remain within a range of $10,000 to $11,000 per metric ton during 2026–2027 due to a supply surplus, though the long-term outlook for industrial metals remains positive.

The bank highlighted three key factors likely to cap copper’s upside:

Chinese buyers may reduce purchases if prices exceed $11,000 per ton, as seen in Q2 2024; high U.S. inventories could quickly rebalance the market if price spreads on the London Metal Exchange (LME) narrow; and demand linked to data centers may have been overestimated compared to initial projections.

Copper prices dropped Friday after U.S. President Donald Trump said Washington was considering a major increase in tariffs on Chinese imports, raising fears of an escalating trade war between the world’s two largest economies.

Goldman: Indonesian producer margins to determine nickel’s path

Regarding the nickel market, Goldman Sachs said profit margins for Indonesian producers need to decline further to slow supply growth and reverse the persistent surplus.

The bank expects nickel prices to fall 6% to $14,500 per metric ton by December 2026.

Aluminum market seen in surplus, prices unlikely to recover before 2030

Goldman also forecasts a surplus in the aluminum market as Indonesian supply rises from mid-2026.

It projects aluminum prices at around $2,350 per ton in Q4 2026, with no return to current levels before 2030.

China to become net zinc exporter by 2026

The bank expects China to shift from a net importer to a net exporter of zinc in 2026, driven by increased domestic production.

“We expect China’s rising output to move the country from deficit to surplus, while the market outside China turns to deficit,” the report said. “To achieve global balance, Chinese producers will need to be incentivized to export.”

Cobalt supported by supply tightness and new export quotas from Congo

In the cobalt market, Goldman Sachs noted that new export quotas imposed by the Democratic Republic of Congo — which accounts for 70% of global supply — are likely to trigger a deficit in 2026, tightening the market and supporting prices.

Lithium to stay depressed until 2026 amid persistent oversupply

Goldman also expects lithium prices to remain subdued for longer, averaging $8,900 per metric ton in 2026, citing ongoing oversupply keeping the market bloated.

As of 16:07 GMT, spot nickel prices were down 0.7% at $14,900 per ton.