Recently, JPMorgan Chase released the latest global copper supply tracking report. The team covered 27 countries around the world, over 100 operating mines, and 25 major listed copper companies. The sample production capacity accounted for 54% of the global copper supply, effectively conducting a comprehensive quarterly health check on global copper supply.
The three most core questions:
First, in this third-quarter supply decline, was it a short-term weather disturbance or the beginning of an annual contraction? Can it be quickly restored in the fourth quarter?
Second, the 2027-2028 supply boom that the market has been talking about for a long time - how much real increase is there? From which mines does it mainly come? Is there a risk of not meeting expectations?
Third, from the current supply and demand situation, will the copper market be in a tight balance or shift to a surplus in the next two years? What are the core variables that determine the price?
01
Weak supply in the third quarter: Is it a "real shortage" or a seasonal disturbance?
Let's start with the most important data for the third quarter - this is also the core argument of the bulls in recent times.
1. A 43,000-tonne reduction in production in a single quarter, down 180,000 tonnes from the previous peak.
According to the report, in the third quarter of 2026 (the third quarter), the copper production of the covered mines decreased by 1.3% compared to the previous quarter, corresponding to a reduction of approximately 43,000 tonnes. This figure may seem small at first glance, but when viewed over a longer period, it becomes clear that the current production level is 180,000 tonnes lower than the previous cycle's peak in the June quarter of 2025. In other words, after a year of fluctuations, climbing and disturbances, the production center of the world's major mines not only did not rise but actually retreated.
The main factors dragging down production are very concentrated, and they are mostly the familiar global top mines. Looking at the year-on-year production reduction in 2026:
· Escondida: A 171,000-tonne reduction, ranking first globally. As the world's largest copper mine, the decline in grade and extreme rainfall have directly lowered the global supply baseline. In the third quarter alone, its production dropped by 59,000 tonnes compared to the previous quarter, being the biggest drag on the weak performance in the third quarter.
· Kamoa-Kakula: A 110,000-tonne reduction, the star copper mine in the Democratic Republic of the Congo was affected by grade fluctuations and maintenance schedules, and its climbing pace was significantly slower than the market's expectations at the beginning of the year.
· Grasberg: A 87,000-tonne reduction, the super copper mine in Indonesia is in the transition period from open-pit to underground mining, and the release of underground mines is slower than planned, resulting in pressure on annual production.
· Additionally, Spence and Centinela in Chile also reduced production by 57,000 tonnes and 46,000 tonnes respectively, the collective fluctuations in the South American region were the core reason for the small supply year in 2026.
2. A strong rebound of 150,000 tonnes in the fourth quarter? How certain is the recovery?
For the fourth quarter, the report gives a very clear judgment: Production will see a strong rebound, expected to increase by approximately 150,000 tonnes, almost recovering all the losses in the third quarter.
The confidence for the rebound comes from two core logics: First, the impact of rainfall in Chile has subsided, and production capacity is concentrating on replenishment. The strong rainfall that previously suppressed the northern mining areas in Chile was a typical short-term extreme weather event, which neither changed the upper limit of the mine's production capacity nor affected the long-term mining plan. As the weather improves, the affected mines in Escondida and Spence will resume normal production, and the previously suppressed production will be released in the fourth quarter in a concentrated manner. Second, the climbing of core mines continues. The underground mine capacity of Grasberg is still steadily increasing, and there will be a 12,000-tonne increase in the fourth quarter compared to the previous quarter; the Panama copper mine also starts to contribute a small amount of production in the fourth quarter and gradually enters the resumption rhythm.
In simple terms: This round of supply weakness in the third quarter is essentially a phased disturbance caused by "weather + maintenance", not a problem with the mine's production capacity. As long as no new extreme events occur in the fourth quarter, production recovery is a likely event. Treating the short-term production reduction as the starting point of supply contraction is an overinterpretation.
02
2027-2028 Supply Expansion: Moderate Increase or Torrential Flood?
If short-term fluctuations are merely minor episodes on the market surface, then the supply expansion in the next two years will be the core factor determining the medium and long-term direction of copper prices.
1. A net increase of over 2 million tons in two years, with supply growth reaching a new high in the past decade
Let's present a set of the most core annual production data, all from the listed companies covered by JPMorgan Chase (accounting for 54% of global supply):
· In 2026: Total production was approximately 131.83 million tons, a year-on-year decrease of 261,000 tons, it was undoubtedly a supply poor year;
· In 2027: Total production was approximately 141.7 million tons, a year-on-year increase of 987,000 tons, officially initiating the supply expansion cycle;
· In 2028: Total production was approximately 152.59 million tons, a year-on-year increase of 1089,000 tons, supply release accelerated further.
Converted to growth rates, the production growth rates of the sample mines in 2027-2028 were all above 7.5%, which is a very rare high supply growth rate in the past decade. The last time such a high supply growth occurred consecutively was during the mining super cycle after 2010-2012, when the production ramp-up boom occurred.
If expanded to a global perspective, the supply model of JPMorgan Chase's commodities team shows: In 2026, global copper mine production only increased by 530,000 tons; by 2027, the global production increase will reach 1.43 million tons; in 2028, it will further increase to 1.57 million tons. Notably, the listed companies contributed approximately 70% of the global supply increase in 2027. This means that the main force of this expansion is mature mines that have already been put into production and have transparent information, rather than far-term projects that may be delayed at any time. The certainty of implementation is much higher than market expectations before.
2. Breakdown of 2027 Supply Increase: Two Mines Contributed Nearly One-Third
Specifically at the mine level, the production increase pattern in 2027 was very clear, with the contribution of leading mines being extremely high. The top five mines in terms of production increase in 2027 contributed 508,000 tons of increase, accounting for more than half of the total annual increase:
1. Grasberg: A year-on-year increase of 171,000 tons, it was the largest supply increase source in the world in 2027. This super copper mine in Indonesia will fully release its underground mine capacity in 2027, with an annual production from 2026 of 374,000 tons increasing to 544,000 tons, with a very strong ramp-up certainty.
2. Collahuasi: A year-on-year increase of 151,000 tons, the expansion project in the core mining area of Chile was implemented, with an annual production from 396,000 tons jumping to 548,000 tons, directly entering the top-tier mines in the South American region, being the most core increase in the South American production area. Only these two mines contributed 322,000 tons of increase, accounting for nearly one-third of the total 987,000 tons of annual increase.
3. Dulong Copper Mine: A year-on-year increase of 65,000 tons, as one of the largest under-construction copper mines in China, Dulong of Zijin Mining continues to climb, being the core growth pole of the domestic production end.
4. Oyu Tolgoi: A year-on-year increase of 61,000 tons, Rio Tinto's Mongolian giant copper mine is steadily advancing its underground mine capacity release, with production continuously released.
5. Cobre Panama: A year-on-year increase of 60,000 tons, the core premise is the successful restart in the middle of 2027, contributing only half a year's worth of production.
Of course, there are also reduction items to offset. The largest reduction in 2027 was still Escondida, a year-on-year decrease of 1.48 million tons, the global largest mine's grade decline trend is still continuing; Antamina reduced production by 60,000 tons, and Olympic Dam reduced production by 32,000 tons. However, overall, the increase in production far outweighed the negative impact of the reduction, resulting in a significant net increase, and the growth was multi-faceted, not changing the overall expansion direction of the year due to fluctuations in a single mine.
3. Incremental Increase in 2028: Cobre Panama Becomes the Largest Variable
By 2028, the pace of supply expansion will not only not stop but will even accelerate further - the total sample increment for the year will reach 1.089 million tons, more than that of 2027.
The most core variable among them is Cobre Panama (the Copper of Panama). Many people may be familiar with this mine: it is the largest copper mine in Central America, with annual production approaching 300,000 tons before it was shut down. After it was suspended at the end of 2023 due to policy disputes, it has been the biggest uncertainty in global copper supply. According to the report's base assumption, this mine will restart in mid-2027 and achieve full production in 2028. Just this one mine can contribute a nearly 300,000-ton year-on-year increment, becoming the largest single supply source in the world in 2028.
In addition, the capacity ramp-up of major mines such as Grasberg, Koyabasi, and Oyu Tolgoi is still continuing, and African mining areas such as Tenke, Kisanfu, and Kamoa-Kakula are still continuously releasing capacity. From 2026 to 2028, the production ranks of the top 10 mines worldwide will undergo a significant reshuffle, and many second-tier mines that were originally in the second tier will enter the global first tier by expanding production and ramping up capacity.
Of course, supply expansion is never guaranteed. The report also implicitly mentions three potential risks that may lead to a final increment that is not as expected:
· Policy Risk: The restart progress of Cobre Panama is not as expected, or it may be postponed again; mining policies in major producing countries such as Peru and Chile have tightened, with tax increases, environmental restrictions, or community protests affecting production.
· Construction Delay: Project delays in copper mines are common in the industry. Slow infrastructure implementation, late equipment delivery, and personnel unavailability may cause the production release rhythm to be postponed.
· Unexpected Decline of Old Mines: Old mines such as Escondida have a faster decline in grade, with the reduction in production of old mines exceeding the increase in production of new mines, offsetting some of the expansion benefits.
03
Global Supply and Demand Balance Sheet: Is It Surplus or Balanced?
After examining the details of the supply side, we need to broaden our perspective to the global supply and demand panorama to truly understand the current contradictions in copper prices.
1. Supply Pattern: South America is the stabilizer, Africa is the new engine
From the regional distribution of global copper production, the pattern is very clear:
· Central and South America: The absolute core of supply. In 2026, the production is 857.6 million tons, accounting for more than 35% of the global total. Just the two countries of Chile and Peru contribute nearly 30% of the global copper production. It can be said that a sneeze from South America will cause a cold wave in global copper supply.
· Africa: The fastest-growing new engine. With the continuous ramp-up of copper and cobalt projects in Congo-Kinshasa and Zambia, the mine production from 2023 to 2026 has increased from 377.6 million tons to 483.7 million tons, and is expected to exceed 550 million tons in 2028, growing by nearly 50% in four years. Among them, Chinese mining enterprises are the absolute main force.
· Asia (China): In 2026, the production is 204.6 million tons, with a self-sufficiency rate still low, but domestic large mines such as Dulong and Yulong continue to contribute increments, and the production steadily increases.
· North America, Europe and Oceania have relatively stable production, with little fluctuation, and have limited impact on global marginal supply.
2. Demand Pattern: China takes the lead, new energy becomes a new addition
The concentration of demand is even higher than that of supply. In 2026, the total global refined copper consumption is 2748.1 million tons, of which the Asian region accounts for 2005.7 million tons, accounting for more than 70%; only China alone has a consumption of 1585.5 million tons, accounting for 57.7% of the global total, and is undoubtedly the core of global copper demand. Traditional power grid construction, real estate completion, and household appliance manufacturing are the basic demands, while new energy vehicles, photovoltaics, wind power, and energy storage are the most certain new additions, contributing stable demand growth each year.
When comparing supply and demand together, it can be seen that: In the next two years, the global copper demand growth rate is approximately 2%-3%, corresponding to an annual increment of 50-80 million tons; while the annual increment of the supply side is 140-150 million tons, the supply growth rate is significantly faster than the demand growth rate. This means that the "supply gap" that has been repeatedly hyped in the market will gradually narrow in 2027-2028 and even turn to a slight surplus.
3. The balance is fragile, and the price core has shifted to macro
However, a common misconception must be corrected here: "Surplus" does not mean that the copper price will plummet. According to the report's calculation, the balance status of the global refined copper market is as follows:
· 2026: Surplus of 38.2 million tons;
· 2027: Surplus narrows to 9.2 million tons;
· 2028: Surplus expands to 25.4 million tons.
The surplus of several million tons, placed in a global consumption volume of over 27 million tons, accounts for less than 1% of the total. Especially the 9.2 million tons of surplus in 2027 is almost the "tight balance" state - as long as a large mine has a production accident, policy changes, or extreme weather, supply and demand can quickly shift from surplus to gap.
Also, because the fundamentals themselves do not have a major directional contradiction, JPMorgan Chase clearly pointed out: The main risk of copper prices in the future is highly related to the direction of tariff policies. In other words, what determines the direction of copper prices now is not the basic fluctuations of mines producing a few more tons or a few less tons, but the Fed's interest rate reduction rhythm, the strength of China's economic recovery, and changes in global trade environments. This is also the core reason why copper prices have always followed macro news rather than supply data recently.
04
Global Overview of Copper Companies: Who Are the Growth Champions and Who Are the Cash Cows?
This report covers 25 major listed copper companies worldwide, spanning multiple markets such as Asia-Pacific, Europe, and Latin America. We categorize them into three types to clarify the investment logic for different targets.
First Tier: Global Mining Giants, The Steady Rockers as the Anchor
Multifaceted mining giants like BHP, Rio Tinto, and Glencore are the core bottom positions for investing in the copper sector. Their common characteristics are: large production capacity, strong production stability, abundant cash flow, and high dividend rates. Copper is just one of their core businesses, and they have extremely strong anti-cyclical capabilities. From valuation perspectives, the EV/EBITDA in 2027 is generally in the range of 5.5-7 times, with a dividend rate of 3.5%-5%, and sufficient safety margins. Among them, Freeport-McMoRan has greater flexibility, with the Grasberg copper mine as its core asset. The ramp-up of the mine capacity will directly drive the company's performance growth. JPMorgan has given it an增持 rating and a target price with a 44% upside potential.
Second Tier： Chinese Growth Mining Companies, Double-Click Opportunities of Expansion and Valuation
Chinese mining companies like Zijin Mining and Luoyang Molybdenum are the most outstanding growth stocks in the global copper industry in the past two years. Their biggest feature is： their own production has been growing at a high rate continuously. Even if the copper price does not rise, they can achieve performance improvement through capacity expansion.
· Zijin Mining：增持评级, target price corresponding to 74% upside potential, 2027 EV/EBITDA is only 5.6 times, dividend rate 4.2%. Domestic projects such as Drakon, Serbian copper mine, and projects in the Democratic Republic of Congo have been blooming, and copper production has been continuously increasing year by year. It is the most growth-oriented target among Chinese mining companies.
· Luoyang Molybdenum：增持评级, target price corresponding to 107% upside potential, 2027 EV/EBITDA is only 4.3 times, dividend rate 5.2%. Its two copper mines, Tenke and Kisanfu, continue to expand production, driven by copper and cobalt, and the valuation is at an extremely low level in the industry.
· Jiangxi Copper： Neutral rating, typical high dividend defense
The third tier: Regional characteristic stocks, each with its own specific logic
· Latin America: Southern Copper, Vale of Brazil, with excellent resource endowment and generally high dividend rates;
· Australia: Capstone Copper, Sandfire, etc., small and medium-sized market-cap stocks, with their own logic of project commissioning, having greater stock price elasticity;
· Europe: Antofagasta, KGHM, etc., holding core high-quality mining areas, with strong profit stability.
Overall, the current valuations of the mainstream copper enterprises worldwide are generally at historically low levels. The proportion of high-dividend stocks is very high. Even if the copper price experiences a correction, the downward space of the sector is relatively limited.
Final remarks
To sum up, the current copper market does not have many mysterious stories. The logic for the short term, medium term, and long term is very clear: In the short term, the reduction in production in the third quarter is a temporary phenomenon caused by weather disturbances, and it will be restored in the fourth quarter. The supply side will not be the driving force for continuously pushing up the price; In the medium term, 2027-2028 is a certain supply expansion cycle, with a cumulative increase of over 3 million tons in global mine production over the two years, and the supply and demand will shift from a tight balance to a slight surplus, making it difficult for the fundamentals to support a single-sided bull market for copper prices; In the long term, the growth in copper demand brought by new energy, AI data centers, and power grid upgrades is certain, which will gradually absorb the pressure from supply expansion, and the long-term value of copper remains solid.