Chile posts weakest Q2 copper output in 19 years

Chile registered its weakest second-quarter copper production in data going back to 2007, with output falling 7.7% year-on-year to 1.27 million metric tons, according to calculations based on monthly data published Friday by the country's statistics bureau. The figures underscore the mounting challenges facing the world's largest copper supplier as aging mines struggle to lift output even as billions of dollars in investment flow into the sector.bloomberg

Broad declines across major producers

The quarter's weakness was widespread. Codelco output declined 18.3% year-on-year to 106,300 tonnes, while Escondida production fell 17.6% to 108,800 tonnes and Collahuasi output dropped 19.3% to 31,000 tonnes. A partial recovery emerged in June, when Chilean copper production rose 5.1% year-on-year to 447,294 metric tons, according to the INE statistics agency. Mining overall climbed 6.0% in June, with metallic mining expanding 4.6%, supported by increased copper extraction and processing.investing+2

The rebound was not enough to offset earlier losses. Deadly storms that struck central and northern Chile in July killed at least 13 people and disrupted operations at mines run by Anglo American, Antofagasta, Lundin Mining ↗ 3.22%, and state-owned Codelco. Lundin said operations at its Caserones mine could take two to three weeks to restart after heavy snowfall damaged power lines on July 18. Antofagasta temporarily suspended its Los Pelambres mine but resumed operations and maintained its full-year guidance of 650,000 to 700,000 tonnes.ibtimes+1

Supply squeeze intensifies

Chile has already lowered its 2026 copper production forecast by 2% to 5.3 million metric tons, with analysts warning of a second consecutive year of declining output. Natalie Scott-Gray, senior metals demand strategist at StoneX, told CNBC that the storms "amplify mining supply risks for Chile."cnbc

Copper hit an all-time high of $6.70 per pound on June 2, and prices remain elevated. London Metal Exchange inventories fell to 255,400 tonnes — the lowest since February — while roughly 64% of visible global inventories are now held in the United States amid ongoing tariff speculation. Chile raised its average 2026 copper price forecast to $5.90 per pound from $5.46 previously.investing+1

Structural headwinds persist

The production shortfall reflects more than weather. Declining ore grades and permitting delays have constrained supply growth industry-wide. Ewa Manthey, commodities strategist at ING, said the storms reinforce the broader theme: "Supply is increasingly struggling to keep pace with demand." With Section 232 tariff uncertainty unresolved and AI-driven electricity infrastructure boosting copper consumption, Scott-Gray said "it is not out of the question that we will see another record high for copper being posted this year."ibtimes+1