Chile's copper production fell to 415,000 tonnes in April, the lowest April output since 2003, intensifying concerns about global supply adequacy as the market approaches a projected deficit. State-owned Codelco, the world's largest copper producer, saw output drop 8.4% year-on-year to 105,000 tonnes, its weakest performance since the pandemic era. Declining ore grades at the Chuquicamata and El Teniente divisions, combined with water shortages in the Atacama region, are constraining production despite operational improvement programs.
The global concentrate market is under unprecedented strain. Spot treatment and refining charges (TC/RCs) fell to -$70/t by late March 2026, the lowest level on record, indicating that smelters are paying miners to secure feed. This negative TC environment is forcing higher-cost smelters, particularly in China and Europe, to consider production cuts. China's refined copper exports surged 1,100% year-on-year in November 2025, as the country pivoted from net importer to exporter, further complicating global supply-demand balances.
The International Copper Study Group (ICSG) projects the global refined copper market will record a 500,000-tonne surplus in 2025, revised up from a prior estimate of 215,000 tonnes. However, the ICSG expects the market to shift to a 150,000-tonne deficit in 2026 as mine supply growth stalls and demand from grid infrastructure, AI data centers, and electrification accelerates. JP Morgan forecasts a refined copper deficit of 330,000 tonnes in 2026, citing tariff-induced stockpiling and structural demand growth as key drivers.
The Chile output data confirms structural supply tightening. With spot TCs negative and the market shifting to deficit, procurement teams should secure annual framework agreements now. Consider building buffer inventories ahead of H2, as the deficit is projected to intensify through year-end.