Goldman lowers copper supply forecast on Grasberg disruption, sees deficit in 2025

[Redator]

Goldman Sachs has lowered its global copper supply forecast for both 2025 and 2026, citing recent disruptions at the world’s second-largest mine.

Production at the Grasberg mine in Indonesia has been under suspension since Sept. 8 after a landslide unleashed 800,000 tonnes of mud into the Block Cave area, trapping seven workers and causing severe damage across the mine’s infrastructure.

US-based Freeport McMoRan (NYSE: FCX), the mine’s operator, immediately halted mining activities to prioritize the rescue of the mine workers, and to date has recovered two bodies. As the search continues, the company has declared force majeure and is investigating the incident.

This disruption, Goldman estimates, could lead to as much as 525,000 metric tons of lost copper mine supply. As a result, the bank dropped its supply forecast for the second half of 2025 by 160,000 tons and its 2026 forecast by 200,000 tons.

Grasberg output hit

Production at Grasberg, consisting of the Block Cave as well as the Big Gossan and Deep MLZ mines, is now expected to fall by 250,000 to 260,000 tons in 2025 and by 270,000 tons in 2026, the bank adds. Data from S&P Global shows that the mine had produced over 160,000 tons during the first half of 2025.

When it declared force majeure earlier this week, Freeport said it expects Grasberg’s fourth quarter production “to be very low,” as the unaffected areas (Big Gossan and Deep MLZ) of the mine could only restart in the middle of the quarter.

As for the rest of the mine, Freeport’s management said operations could restart sometime next year, though its 2026 copper output would be significantly lower — as much as 35% — than its previous forecast as it gradually ramps up production. A full recovery is anticipated in 2027, it added.

Shift to deficit

The setback has dealt a crucial blow to Freeport, as Grasberg accounts for half of its proven and probable reserves and 70% of its projected copper and gold output through 2029. Shares of the Phoenix, Arizona-based miner have fallen by more than 21% since its update, and are now trading at levels last seen during the April market turmoil.

Grasberg’s suspension also represents a turning point for the global copper market. Goldman says the disruption has shifted its 2025 global copper balance from a projected surplus of 105,000 tons to a deficit of 55,500 tons, though 2026 is expected to remain in a small surplus.

The projected production loss, Goldman says, exceeded its typical allowances for global supply disruptions. This has led the bank to revise its estimates for global mine production growth for 2025 to 0.2%, down from a previous forecast of 0.8%, and 1.9% the year after, down from 2.2%.

The supply risks further support Goldman’s bullish outlook on the price of copper, with the bank reaffirming its target of $10,750 a ton by 2027.

Click on chart for live prices.

In the near term, Goldman sees upside risks to the December 2025 LME price forecast of $9,700 a ton, with possibilities of the $10,200-$10,500 range. Those contracts are currently priced at $10,336 a ton, up 3% on the day.