The International Copper Study Group (ICSG) estimates a global refined copper deficit of 150,000 tonnes for 2026, driven by supply disruptions at multiple Tier 1 mines and resilient demand growth. J.P. Morgan projects an even larger shortfall of up to 330,000 tonnes, reflecting a more pessimistic view on supply recovery timelines. (FACT: Carbon Credits, May 21, 2026; J.P. Morgan; ICSG)
The deficit is being driven by a cluster of supply shocks. Freeport's Grasberg mine remains at 40-50% capacity after the September 2025 mudslide, with full recovery pushed to 2028. Ivanhoe Mines cut Kamoa-Kakula's 2026 guidance by 25%. First Quantum's Cobre Panama is indefinitely closed. Teck's QB2 is producing below original specifications. Cumulatively, these four mines represent roughly 1 million tonnes of lost annual production relative to original 2026 expectations. (FACT: ING, company guidance, Carbon Credits)
On the demand side, AI data centre construction has emerged as an unexpected driver. Each AI data centre consumes significantly more copper than a traditional facility — estimates range from $10-20 billion in copper content for the global AI buildout through 2030. This demand was not in any 2024 forecast and is adding pressure to an already tight market. (FACT: Carbon Credits, May 21, 2026)
Copper prices have responded accordingly. LME copper traded at $14,153/t on May 13, its first sustained break above $14,000 since January. COMEX copper futures hit a record near $6.64/lb on the same day. With the deficit expected to persist through at least 2026 and the supply pipeline constrained by long lead times for new mines, the market is pricing in a structural rather than cyclical deficit. (FACT: Carbon Credits, LME, COMEX)
The ICSG deficit confirms what the price action has been signaling: the copper market is structurally undersupplied. With mine supply constrained and AI-driven demand adding unexpected pressure, the deficit is likely to persist beyond 2026. Procurement strategy: (1) Lock H2 2026 volume at current LME levels — the deficit supports prices above $14,000/t. (2) Monitor J.P. Morgan's deficit estimate vs ICSG — if bank forecasts keep rising, expect further price upside. (3) Factor AI-related demand growth into medium-term procurement planning — this is not a transitory factor.