Deadly winter storms sweeping through Chile have disrupted operations at several major copper mines, compounding supply concerns in a market already stretched thin by competing demand from the United States and China.
The severe weather has killed 13 people across South American nations over the past week, with heavy snow, flash flooding and high winds forcing production halts and evacuations at mines operated by Anglo American, Antofagasta, Lundin Mining and state-owned Codelco. Chile accounts for more than a fifth of global copper production.
Antofagasta halted mining and processing at its Los Pelambres operation, while Barrick evacuated employees due to extreme conditions. Lundin Mining said Monday that its Caserones mine in Chile’s northern Atacama region could take two to three weeks to restart after power lines were damaged by heavy snowfall, forcing a suspension of operations on July 18.
The Vancouver-based company’s Candelaria mine also faced rainfall disruptions, though it continued operating using existing ore stockpiles before returning to full capacity.
Supply Squeeze Intensifies
While strategists describe the immediate impact as limited, the disruptions arrive at a precarious moment for copper markets. Prices hit an all-time high of $13,643 per metric ton on June 2 as concerns over a global supply squeeze intensified.
“With the market already facing supply disruptions, tariff uncertainty and tighter concentrate availability, any prolonged weather-related outages in Chile could provide additional support for prices,” Ewa Manthey, commodities strategist at ING, told CNBC via email.
The storms reinforce a broader challenge facing the copper market: supply is struggling to keep pace with surging demand for the metal used in AI data centers, electric vehicles, power grids, smartphones and industrial machinery.
Natalie Scott-Gray, senior metals demand strategist at StoneX, pointed to uncertainty over potential U.S. Section 232 tariffs and China’s crackdown on scrap copper availability as factors that have already tightened global supplies this year. Chile recently downgraded its 2026 output forecast by 2% to 5.3 million tonnes.
“It just amplifies mining supply risks for Chile, in which we expect a second year of declining output,” Scott-Gray said.
Major Producers Stay Bullish
Despite the weather-related setbacks, mining executives remain optimistic about copper’s long-term prospects. Duncan Wanblad, CEO of Anglo American, told CNBC’s “Squawk Box Europe” that the company is “very, very bullish” on copper’s fundamentals.
Anglo American reported a 35% jump in earnings before interest, taxes, depreciation and amortization to $4 billion in its first-half trading statement Thursday, aided by favorable copper prices. Wanblad said the London-listed miner has “reshaped its business” around copper.
Scott-Gray described the storm impact on major producers as “temporary and limited,” noting that large mining companies have contingency plans to contain damage. Smaller miners with less operational flexibility face greater risk from the disruptions.
Inventory Concerns and Price Outlook
The supply picture is further complicated by unusual inventory patterns. Nearly two-thirds of visible global inventories are now held in the United States, as tariff fears, strategic stockpiling and import arbitrage have pulled supplies away from other markets.
Inventories on the London Metal Exchange and Shanghai Futures Exchange remain below their five-year averages, signaling what Scott-Gray called “real world physical tightness.”
With three-month copper on the LME trading around $13,750, “it is not out of the question that we will see another record high for copper being posted this year, especially with speculative net longs now prevailing across all major exchanges,” Scott-Gray said.
She expects Chinese buying to ease in August, potentially slowing withdrawals from LME inventories. However, the biggest uncertainty remains what action the U.S. administration will take on Section 232 tariffs.
George Cheveley, natural resources portfolio manager at Ninety One Asset Management, noted that while storms are typically short-lived unless they cause major infrastructure damage, speculation on U.S. tariff changes remains a main driver of price movements rather than physical demand.
Source: www.cnbc.com — https://www.cnbc.com/2026/07/31/copper-prices-chile-storms-mines-ai.html
This article is for informational purposes only and does not constitute financial, investment, tax, or legal advice. Do your own research and consult a licensed professional before making financial decisions.
