El Niño: another test for an already tight copper market

El Niño is likely to tighten an already constrained copper market, but its effects will differ sharply by mine and region.

• The September forecast assigns a 75% chance that the event will be the strongest since records began in 1950, with rainfall, drought and higher temperatures threatening mining operations.
• In Chile, heavy rainfall is forecast in central regions through November 2026, exposing around 1.3 million tonnes of annual copper production based on 2025 output; heavier rain could also affect mines near the Atacama Desert.
• In Zambia and the Democratic Republic of Congo, higher temperatures and drought could reduce hydropower availability, although water levels have recovered from previous lows.
• El Niño may benefit Grasberg in Central Papua because reduced rainfall supports de-watering after disruption from rain and mudflows over the previous 12 months.
• Copper supply is already pressured by disappointing mine production, permitting difficulties, skilled-labour shortages, rising costs and long project-development timelines, while Chinese inventories are exceptionally low and electrification supports long-term demand.

Takeaway: Higher copper prices could reward producers that maintain output, but investors should distinguish resilient mines from disrupted ones and diversify across minerals, geographies and value-chain segments.