Chile's Copper Output Projected to Decline 2.6% in 2026 Before 2027 Recovery, Says Cochilco
Key Takeaways
- •Cochilco projects Chile's copper output will fall 2.6% to 5.27 million metric tons in 2026 before recovering to 5.55 million metric tons in 2027.
- •The 2026 production decline stems from weak first-half performance at Codelco and BHP's Escondida and Spence mines, compounded by declining ore grades and chronic water scarcity.
- •The expected 2027 recovery is supported by operational improvements at multiple mines including El Teniente, Quebrada Blanca, Collahuasi, Los Pelambres, and Mantoverde.
- •Cochilco raised its 2026 average copper price forecast to $5.95 per pound while keeping its 2027 projection at $5.10 per pound.
- •Chile accounts for approximately one-quarter of global copper supply, making its production trends critical for worldwide electrification and energy transition supply chains.
Chile's copper production is forecast to fall 2.6% in 2026 to 5.27 million metric tons before rebounding in 2027, according to the country's state copper commission, Cochilco, which issued the projection on Tuesday.
The decline reflects weaker-than-expected performance at state miner Codelco — the world's largest copper producer — as well as at BHP's (ASX:BHP) Chilean operations during the first half of the year. Codelco has been grappling with declining ore grades at several of its aging mines, a long-standing challenge that has prompted multi-billion-dollar investments in structural projects aimed at sustaining output.
Cochilco attributed the lowered 2026 forecast to a particularly weak first half, during which output declined at Codelco and at BHP's Escondida and Spence mines. Several operations across the country also faced structural limitations that constrained production. Chile's mining sector has additionally contended with chronic water scarcity, particularly in the Atacama Desert region where many of the country's largest operations are located.
The agency expects output to partially recover in the second half of 2026. Improvements at Codelco's El Teniente mine and continued progress at the state miner's Rajo Inca project are expected to contribute to the rebound. Additional support is anticipated from greater operational stability at Teck's (TSX:TECKb) Quebrada Blanca (QB2) mine, normalized operations at Capstone Copper's (TSX:CS) Mantoverde, and improved ore grades and water availability at Collahuasi — a joint venture owned by Anglo American (LON:AAL), Glencore (LON:GLEN), and a Japanese consortium.
Los Pelambres, operated by Antofagasta (LON:ANTO), is also expected to contribute to the 2027 recovery.
For 2027, Cochilco projects Chilean copper output will rise to 5.55 million metric tons. The rebound will be driven by a low comparison base and the gradual recovery and ramp-up of major operations. Key contributions are expected from Codelco, Quebrada Blanca, Escondida, Collahuasi, Los Pelambres, and Mantoverde.
On the pricing front, Cochilco raised its forecast for the average copper price in 2026 to $5.95 per pound, up from a previous estimate, while maintaining its 2027 projection at $5.10 per pound. The commission cited strong global demand and persistent supply constraints as factors keeping the copper market tight. Copper is a critical material for global electrification, used extensively in electric vehicles, renewable energy infrastructure, and power grid expansion, and supply disruptions in Chile — which accounts for roughly one-quarter of global output — have downstream implications for energy transition supply chains worldwide.
Chile is the world's top copper-producing nation, accounting for roughly one-quarter of global supply.
Source: Investing.com via Hellenic Shipping News
