Black Swan Event Hits: Copper Prices Soar Over 2,000 Yuan in a Single Day

1、 Trend analysis

According to monitoring data from Shengyi Society, a major mudslide accident occurred at Grasberg mine, an Indonesian subsidiary of American mining giant Freeport McMoRan, driving up global copper prices significantly. As of September 25th, copper prices were reported at 82435 yuan/ton, an increase of over 2000 yuan/ton from the previous day, with a daily increase of 2.97% and a year-on-year increase of 5.91%.
The shutdown of the world’s second-largest copper mine triggered a ‘black swan’ event
On September 24th, American mining giant Freeport McMoRan (the world’s second-largest copper mine) announced in a statement that its supply contract has entered a state of “force majeure”. And this sudden event was quickly classified by Wall Street as a ‘black swan event’, igniting market concerns about the long-term shortage of copper supply and driving copper prices to soar sharply.
Freeport has confirmed that the mudslide incident at its Grasberg Block Cave mine in Indonesia on September 8th has resulted in the death of two workers, and five others are still missing. About 800000 metric tons of moist material suddenly poured into the mine, affecting multiple operational levels, which is unprecedented in the company’s decades long mining history.
New York copper surged 4%
Driven by expectations of supply disruptions, COMEX copper futures rose nearly 4% to $4.825 per pound in late Wednesday trading in New York, approaching the top of $5.830 on July 30th and $5.957 on July 24th. The three-month copper price on the London Metal Exchange surged by 2% at one point to $10172 per ton.
The impact is enormous:
Copper and gold production is expected to plummet by 35% in 2026: The impact of this shutdown is far from short-term. The preliminary assessment released by Freeport shows that the company has lowered its copper and gold sales guidelines for the third quarter, which are 4% and 6% lower than its expectations for July 2025, respectively. At the same time, the company expects that copper and gold production in 2026 may drop by about 35% compared to previous estimates. More importantly, the company expects to return to pre accident production levels as early as 2027, casting a shadow over industries such as copper dependent global electric vehicles and renewable energy.
Future losses could reach up to 2 million tons: Goldman Sachs’ commodities team referred to the shutdown of the Grasberg mine as a ‘black swan event’. James McGeoch, an analyst at the bank, pointed out that the impact of this shutdown is enormous. In the next 12 to 15 months, the market will lose 500000 tons of copper supply as a result, and may further lose 1 to 2 million tons. He described the impact as equivalent to the simultaneous shutdown of the Cobre, Komao, and Los Bronces copper mines.

Long recovery period: According to information disclosed by Freeport, approximately 800000 metric tons of moist material suddenly flowed into Grasberg’s underground mine, an unprecedented scale in the company’s decades long mining history. The accident not only occurred in the “PB1C” production block of the GBC mining area, but also damaged the infrastructure required to support other production areas, including railways, ore chutes, and power systems. Freeport expects that unaffected mining areas will not resume operations until the mid fourth quarter of 2025 at the earliest, while the Grasberg mine will begin phased recovery from the first half of 2026. Freeport expects to restore its pre accident production levels as early as 2027.
fundamentals
Excess refined copper turning into shortage
UBS also predicts that the global supply and demand for refined copper will be 27.853 million tons and 27.586 million tons respectively by 2025, with a slight surplus of 267000 tons. After considering the Grasberg shutdown factor, refined copper will become scarce by 421000 tons in 2026, and the supply gap will gradually widen in the future.
Frequent mining disturbances occur
This year, in addition to the impact of the Federal Reserve’s interest rate cuts and export policies on copper prices, supply disruptions in the mining sector have also occurred frequently. For example, in February of this year, Chile, the main producer of copper mines, experienced several weeks of strikes and mine shutdowns caused by nationwide power outages. In late May of this year, the Kamoa Kakula copper mine, the fourth largest copper mine in the world, experienced a mining earthquake, which led to a revision of its 2025 production guidance from 520000 to 580000 tons to 370000 to 42000 tons.
Demand side
High copper prices will undoubtedly suppress consumption in some traditional sectors, and downstream enterprises such as home appliances and infrastructure will face enormous cost pressures. However, the rigid demand from the construction of artificial intelligence computing power centers and the new energy sector provides strong support.

LME copper inventory declines
According to the above chart, LME copper inventories have slightly decreased recently. As of the 25th, LME copper inventory was 144425 tons, down 9.1% from the beginning of the month.
Market forecast:
The Indonesian mining accident has led to a decline in supply expectations, and the market is concerned about further deterioration of copper mine supply, which has boosted copper prices significantly. At present, the continuous pre holiday stocking and the rising call for anti internal competition policies in China have provided support for copper prices. Due to the upcoming long holiday, there is an expectation for downstream stocking, but the sharp rise in copper prices has suppressed further stocking intentions. Downstream purchases are only based on orders for immediate needs, and spot premiums continue to be under pressure and decline. The current shortage of copper concentrate is intensifying, coupled with industry policy expectations, and it is expected that there is still room for copper prices to rise.