Copper production rose 3.2% sequentially in the third quarter driven by higher production from Antofagasta PLC (LSE:ANTO), MMG, and Ivanhoe Mines Ltd. (TSX:IVN, OTCQX:IVPAF), according to an analysis by Jefferies.
Volume increases at Teck Resources Ltd (TSX:TECK.B), Southern Copper Corporation (NYSE:SCCO), and BHP Group Ltd (LSE:BHP, ASX:BHP) were also noted.
Year-over-year production, however, declined by 1.3% in Q3, attributed by the analysts to lost production at First Quantum’s Cobre Panama mine, with commercial production at the mine suspended in November 2023.
The analysis included copper miners who have reported their Q3 results so far, accounting for about 48% of the global copper mine supply.
They noted that the impact of mine supply growth on the copper market balance remains a key point of debate.
Analysts wrote that some say that there will be a supply overhang over the next year as projects ramp up or expand, suggesting a deficit is “unlikely” until 2026 at the earliest.
“While we include production from these projects in our model, risk to overall supply remains to the downside,” the analysts wrote.
The Jefferies analysts noted that while copper mine supply disruptions have been limited in recent months, they expect supply growth to continue to slow due to depletion and grade declines, among other factors.
“There is risk of further demand volatility in the near-term due to cyclical factors (although we think we are near bottom), but we continue to be bullish over the medium-term due to growing global demand, potentially led by the US, and serious supply constraints,” they wrote.
“Even in a world of 2% global GDP growth, we would expect sizable deficits in the copper market over the course of this decade.”