Copper's surge toward $14,000 per ton is exposing a dual problem: a short-term supply chain disruption and a longer-term shortage that the industry is struggling to solve.
The metal has rallied on tightening supply, tariff-related distortions and optimism that electrification and artificial intelligence will create a lasting demand boom. But the International Energy Agency's (IEA) latest outlook suggests the near-term picture has deteriorated faster than expected. Such concerns are visible from prices; while the metal has done well, miners have barely moved. The Sprott Copper Miners ETF (COPP) is up just 1.89% year-to-date.
A sulfuric acid squeeze, lingering mine outages and extreme weather in Chile are threatening supply just as inventories and processing economics leave little room for error.
Further out, the problem becomes more structural. Even with a modestly improved project pipeline, the IEA estimates that primary copper supply could fall about 25% short of requirements by 2035 under current policy settings. Thus, calls for much higher prices are unsurprising.
Immediate Production Risks
The most immediate threat is sulfuric acid. Over 15% of global primary copper is produced via leaching and solvent extraction-electrowinning (SXEW), a route now held hostage by a supply shock.
With the supply disruption in the Strait of Hormuz, alongside China's export ban through year-end, the situation has rapidly deteriorated. The DRC, where almost 45% of output depends on leaching, and Chile are the most exposed, with some inventories down to just 30–60 days.
"At the global level, reduced acid availability from a prolonged acid ban or sustained high prices would result in global SxEW production curtailments, adding considerable supply stress to an already tight copper supply market," the IEA wrote.
Weather conditions are only compounding the strain. A potential Category 5 storm swept across central Chile, bringing up to 150mm of rain, knocking out power and forcing emergency talks with miners.
Project Pipeline Cannot Close the Gap
The longer-term outlook is constrained by a more stubborn set of problems: declining ore quality, rising development costs and exceptionally long construction timelines.
Average copper ore grades have fallen 40% since 1991, the IEA estimates, while brownfield expansion costs have risen 65% since 2020. Mines can take roughly 17 years to move from discovery to production, and only 5% of copper deposits identified over the past 35 years were discovered in the past decade.
Industry veteran Frank Giustra recently explained how scarce new discoveries are. In his view, only four junior and intermediate producers currently develop world-class projects: Copper Giant Resources Corp. (LBCMF) in Colombia, Solaris Resources Inc. (SLSR) in Ecuador, Aldebaran Resources Inc. (ADBRF) and McEwen Inc.'s (MUX) subsidiary McEwen Copper, both in Argentina.
According to mining.com, BMI expects the market's near-term surplus to narrow ahead of 2026, though they have trimmed next year's mine production growth forecast to 2.4%. From 2027, however, it sees a persistent deficit that widens to almost 1.5 million tons by 2035 as electric vehicles, offshore wind and data centers increase consumption.
"Over the longer term, we expect prices to reach $17,000/ton in 2035, as the structural deficit persists due to a strong demand outlook as the green transition accelerates towards the latter half of the decade," BMI said.
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