The Zhitong Finance App learned that CITIC Securities released a research report saying that the production of major global copper mining companies fell by nearly 5% in the first half of the year, and extreme weather and potential disturbances in key accessories may cause production to continue to decline in the second half of the year. Under the improving trend of supply and demand, the foreseeable continuation of inventory removal will strengthen the trading flexibility of copper prices; if incremental tariffs are implemented in the future, a new round of high-intensity inventory accumulation is expected to boost copper prices to 16,000 US dollars/ton during the year. Looking further afield, the medium- to long-term copper supply growth rate is predicted to be only 2%-2.5%. It is inappropriate to overestimate the 2028-2029 supply peak, but full attention should be paid to the volume flexibility and value brought about by Chinese enterprises leading the increase in production.
Production of major mining companies continued to decline in the first half of the year, and the potential disturbances of extreme weather and key accessories should not be underestimated.
According to CITIC Securities, the output of the world's major copper mining companies in the first half of the year was -4.6% year-on-year (-4.3%/-4.9% in Q1/Q2, respectively), and has declined for four consecutive quarters since Q3 2025. In the first half of the year, leading companies revised their 2026-2027 guidelines by more than 300,000 tons (from the 2025Q2 financial report to the 2026Q2 financial report, the 2026 production guide growth rate of these companies was revised down from +3.9% to -2.0%). Although the latest guidelines suggest that production will resume growth in the second half of the year, multiple factors indicate that production may continue to decline in the second half of the year: 1) at the quantitative level, Chile's national copper industry, Antofagasta, etc. completed less than 45% of the guidelines in the first half of the year, and there is a risk of subsequent revisions; 2) at a qualitative level, the El Niño phenomenon, which has not been experienced in many years, may exacerbate extreme weather risks in Chile and other places, and disturbances in copper production may increase. Furthermore, if the US-Iran conflict situation is delayed, it is difficult to resolve concerns that Zambia's sulfuric acid export policy may disrupt the supply of sulfuric acid in the Democratic Republic of the Congo (DRC) and restrict wet copper production.
Intensive fundamentals, trading, and event catalysis are expected to push the copper price above 16,000 US dollars/ton.
CITIC Securities estimates that the actual domestic supply (production+net import volume) and demand for refined copper increased by 2.2%/4.6% year-on-year respectively in January-July. Among them, the core drive on the supply side was the deep contraction of mine-side supply and continued insufficient import volume, while the core drive on the demand side was steady apparent demand and stocking. SMM predicts that the decline in supply will continue in August/September, or more so than the trend of weakening demand, corresponding to the domestic inventory level falling below 100,000 tons by the end of September, providing a natural foundation for the rise in copper prices. Considering that the end of September was also a key point in the implementation of the US refined copper tariff plan, we expect the optimal situation to be incremental tariffs, and the next best situation is that the imposition will not be introduced at this time (that is, there is still an expectation that the introduction will be delayed). Under the incremental tariff situation, the fourth quarter will be a time window for intensive inventory accumulation. Referring to the new high in US refined copper imports in July, which led to a 5% rebound in copper prices, we expect LME copper prices to exceed 16,000 US dollars/ton during the year.
The medium- to long-term supply peak should not be overestimated; the dominance of Chinese capital is once again showing brilliance.
Based on CITIC Securities's analysis and forecast of the production capacity rhythms of major Chinese incremental mines and foreign-funded enterprises, Chinese mines and foreign-funded mines will contribute about 1.5% and 0.8% annualized growth rates to global medium- to long-term supply, respectively. We expect the global copper supply growth rate in 2026-2030 to be -0.6%/+1.9%/+3.0%/+1.4%, respectively. The high rate in 2028-2029 is mainly due to intensive operation and climbing in Chinese mines, but we believe: 1) On the one hand, even at peak production, the supply growth rate is similar to our estimated medium- to long-term demand growth rate (about 3%), and it is difficult to point to price pressure; 2) On the other hand, the performance of Chinese enterprises is expected to fully benefit from the “quantitative compensation” logic.
