Copper shortage 2026 flips a forecast surplus into a 150,000 tonne deficit, and Morgan Stanley calls its own reading the worst in 22 years

Copper shortage 2026, why is there a copper shortage right now

A mud rush at the Grasberg copper mine in Indonesia, plus falling output across Chile, is behind the copper shortage 2026 forecasters are now describing, reversing what they said a year earlier. The International Copper Study Group, the producer and consumer government body that computes the world refined copper balance twice a year, revised its 2026 forecast from a 209,000 tonne surplus to a 150,000 tonne deficit. That is a swing of 359,000 tonnes in about 6 months, between the group October 2025 forecast round and its April 2026 round, a MAOWCE calculation run on the group own 2 published figures.

The Grasberg mine mud rush behind the shortage

Freeport McMoRan, the company that owns Grasberg, states in a filing with the United States Securities and Exchange Commission that an external mud rush, a sudden inflow of mud into the mine, forced a suspension of the Grasberg underground mine on September 8, 2025. Fourth quarter 2025 copper production fell to 640 million pounds, down from 1.0 billion pounds a year earlier, a fall of about 36%, a MAOWCE calculation run on the company own 2 filed figures. The company guides to about 3.4 billion pounds of copper sales for all of 2026, with a phased restart of the mine beginning in the second quarter and about 85% of normal operating output restored only in the second half of the year. Chief Executive Officer Kathleen Quirk said the company priority for 2026 is restoring Grasberg safely and rebuilding value across the company operations in the Americas.

Other forecasters size the same copper shortage differently

Other forecasters size the same 2026 copper shortage differently. Morgan Stanley forecasts a 2026 deficit of 600,000 tonnes, the most bearish supply view among the forecasters compared in the same report, and an earlier reading of that forecast, at 590,000 tons, was described as the most severe copper market deficit in 22 years. JPMorgan forecasts a smaller 2026 deficit of 330,000 tonnes. The fee a smelter charges a miner to turn mined ore into refined metal has compressed toward zero or negative, a sign that smelters are competing hard for scarce ore.

How the shortage is already hitting production and price

The shortage is already showing up away from the mine gate. Chilean copper output fell 9.04% year on year in March 2026, with Codelco output down about 10%, BHP Escondida down 15.75% and Collahuasi down 10.80%. Cochilco, the Chilean government copper commission, raised its 2026 average copper price forecast to 5.95 dollars a pound, citing the slow Grasberg recovery, difficulties at the Kamoa Kakula deposit in the Democratic Republic of Congo, and reduced output at Codelco, Escondida and Spence.