Copper prices on the LME continue to climb, with the suspension of operations at an Indonesian copper mine potentially exacerbating global supply tightness.

Monday (September 29) – London Metal Exchange (LME) copper futures rose more than 2%, continuing their upward trend after last week's significant gains.

On the same day, the copper metal sector in US stocks also showed notable strength: Hudbay Minerals rose 7.42%, Ero Copper rose 7.14%, Taseko Mines rose 4.44%, Freeport-McMoRan rose 3.83%, and Southern Copper rose 3.5%.

As previously reported by Cailian Press, US mining giant Freeport-McMoRan announced that, due to a mudslide incident at the Grasberg copper mine, the company's third-quarter copper sales volume is expected to decrease by approximately 4% year-on-year, and next year's production could be about 35% lower than originally planned.

The Grasberg mine is the world's second-largest copper mine by production. Current copper prices reflect the fragility of global supply, while demand for copper is growing rapidly, driven by transportation electrification, the AI-driven data center boom, and renewable energy.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, stated, "This combination of fragile supply and strong demand means copper prices will continue to find strong support, and could potentially spike further if supply is disrupted by news events."

Commodity experts Michael Haigh and Benjamin Hoff from Societe Generale pointed out, "The copper market will see its largest deficit this year since 2004." The bank previously expected this year's deficit to be 121,000 tonnes.

According to estimates by the bank's commodity research department, the Grasberg mine's monthly production is approximately 68,000 tonnes, with an annual output of about 816,000 tonnes. The mudslide incident could result in a loss of up to about 273,000 tonnes of supply from the mine, further exacerbating the shortage.

Given this deficit, some major Wall Street banks have raised their copper price forecasts: J.P. Morgan expects the average LME copper price in the fourth quarter to be $11,000 per tonne, significantly higher than its July forecast of $9,350 per tonne.

J.P. Morgan analysts acknowledged that prices exceeding $11,000 per tonne could eventually dampen demand, but "we expect the persistent deficit to keep prices elevated."

Goldman Sachs forecasts a copper market deficit of 55,000 tonnes this year (previously it expected a surplus of 105,000 tonnes). The bank also expects the copper price to be between $10,200 and $10,500 per tonne in December.