Grasberg Force Majeure Feeds Copper's Longest Rally Since 1994
Flooding that struck Freeport's Indonesian mine in August 2025 has compounded multiple supply shortfalls, pushing LME copper to within range of its all-time high.
London Metal Exchange copper posted its 10th consecutive weekly gain through Friday (2026-09-04), trading near $14,300 a ton and within reach of the record $14,527 — a streak unmatched since 1994, OilPrice.com reported. The physical market underneath that rally keeps getting thinner.3
Part of the thinning runs back to August 2025, when roughly 800,000 tons of wet material flooded Freeport-McMoRan's Grasberg complex in Indonesia, the world's second-largest copper source. Two workers were killed. The company declared force majeure, and the disruption is still working through the supply chain more than a year later.3
International Copper Study Group data show global mine output fell 1.1% in the first half of 2026, with Codelco and Freeport both posting double-digit declines across that period. Chile, the world's largest copper producer, logged its weakest second quarter in at least 19 years and has cut its full-year output forecast twice, now guiding to a 2.6% decline for 2026.3
The Grasberg disruption did not arrive in isolation. A Congolese export restriction — affecting a relatively small share of Congo's copper trade, most of which already leaves the country as refined cathode — still pushed LME prices up 1.8% on the day the measure became public. The move showed how little the market can absorb without repricing.3
Mine supply is not recovering quickly. Analysts at Deutsche Bank estimate that output from mines, which fell in 2025, will be roughly flat this year. "The supply issue isn't a quick fix," according to Economist reporting.1
The tightness has produced an unusual physical response in the United States. Roughly 200,000 tons of refined copper entered the country in July alone, the largest monthly inflow on record, driving Comex inventories above one million tons as buyers raced to position ahead of a possible 15% import duty.3
But that build obscures more than it reveals. Morgan Stanley still expects refined copper output to rise almost 1% this year despite weaker mine supply, as smelters lean harder on scrap. The Comex surge looks more like tariff-motivated front-running than a signal of genuine end-user demand strength.3
Goldman Sachs raised its end-2026 copper price target by more than 10% in the week of June 1 (2026-06-01), lifting the forecast to $13,735 a ton from $12,465, OilPrice.com reported. The market has since moved well past that revised target.2
The mining industry's structural response to constrained supply has been consolidation. Rio Tinto confirmed it is in talks to acquire Glencore, which would create the world's largest miner at a combined valuation of roughly $220 billion. Last year's total value of mining tie-ups reached $94 billion, the most in a decade, the Economist reported. Consolidation concentrates control of existing assets; it does not add near-term production.1
For traders, Grasberg remains the supply wound with no announced closure date. Freeport has not publicly confirmed when the complex will return to full operating capacity. Until it does, the mine that lost 800,000 tons of material in a single flooding event in August 2025 continues to subtract from the global mine supply balance at a time when no significant new source is ready to fill the gap.3