The International Copper Study Group (ICSG) has revised its forecast for the copper market, significantly reducing the expected surplus for this year due to lower-than-anticipated mine production. Originally predicting a surplus of 467,000 metric tons, the ICSG now anticipates a surplus of just 162,000 metric tons this year, followed by 94,000 metric tons next year, in a global market that totals approximately 27 million tons.
The adjustment supports the current bullish perspective in the copper industry, suggesting a tightening raw material supply that could hinder growth in refined copper production. A major factor contributing to this shift is the unexpected closure of the Cobre Panama mine since December, which has created a substantial deficit of 380,000 tons in the global supply chain. This disruption has forced smelters to rely heavily on the spot market for copper concentrates, where treatment charges have plummeted to exceptionally low levels due to fierce competition for available resources.
This strain on concentrates availability is also reflected in the ICSG’s reduced growth expectations for refined copper production, now set at 2.8% for this year, down from an initial forecast of 4.6%. The growth rate is expected to further slow to just 0.7% next year, constrained by limited raw material supplies despite the continued expansion of smelting capacity in countries like China, Indonesia, and India.
On the demand side, the ICSG has also moderated its expectations, forecasting a refined copper usage growth of 2.0% this year, a reduction from the previously expected 2.7%. Looking ahead to 2025, growth is anticipated to slightly improve to 2.5%. Notably, the growth in copper usage in China, the world’s largest consumer, is expected to slow, while usage outside China is forecast to accelerate, particularly due to new semi-manufactured product capacities coming online in India.
The market dynamics depict a split scenario where investors are increasingly optimistic, driving up copper prices through significant long positions on the London Metal Exchange. Meanwhile, physical buyers, especially in China, appear sidelined by these rising prices, as indicated by the near-zero premium on Yangshan copper, a key measure of Chinese demand. 
