The copper market is caught between two opposing forces: a structurally tightening supply side and softening near-term demand from China, the world's largest consumer. Spot treatment charges fell to around -$70/t by late March 2026, signaling that smelters are effectively paying to secure concentrate feedstock.
Supply disruptions continue to cascade. Grasberg in Indonesia, Kamoa-Kakula in the DRC, and Chile's El Teniente all underperformed through 2025-26. Teck's QB2 project in Chile faced delays, and First Quantum's Cobre Panama remains indefinitely suspended. S&P Global estimates a cumulative concentrate deficit of ~3 million tonnes by 2036.
On the demand side, Goldman Sachs flagged a -8% year-on-year drop in Chinese refined copper demand in Q4 2025. The drag from China's real estate downturn continues, and several June market reports describe a 'China buyers strike' as elevated prices curb spot purchasing. China's PPI rose for a third month in May, but the improvement was concentrated in upstream industries.
The market balance debate is unusually wide. The ICSG projects a 150kt deficit for 2026, while Goldman Sachs sees a 160kt surplus. J.P. Morgan splits the difference at 330kt, depending on tariff impacts and Chinese stimulus effectiveness. The wide range reflects extreme uncertainty around both supply recovery timing and Chinese demand trajectory.
Bank of America raised its 2026 average forecast to ~$11,313/t with spikes to $15,000/t, citing mine disruption concentration. BloombergNEF projects a structural deficit from 2026 onward, with demand for energy transition tripling by 2045.
The disconnect between supply and demand creates opportunity for buyers who time the market. If Chinese demand stays weak through Q3, spot purchases could offer discounts. But the structural supply deficit means any demand recovery will tighten the market fast. Layer in fixed-price contracts for H1 2027 now, while spot weakness creates a buyer-friendly negotiating window.