Key Takeaways
- The world needs ~10 million additional tonnes of copper per year by 2035 to support the energy transition the mine pipeline covers roughly 4 million of that.
- Average ore grades at major mines have fallen from 1.2% in 2000 to 0.65% in 2026, driving up costs even as prices rise.
- Bank of America targets US$6.00/lb copper by 2028; Goldman Sachs is at US$5.50/lb on a 12-month horizon.
- Canadian producers Teck Resources, First Quantum, and Ero Copper are well-positioned for a sustained copper upcycle.
The copper market is facing a structural supply problem that no amount of price incentive can solve quickly. Analysts at Wood Mackenzie, CRU Group, and S&P Global Commodity Insights are aligned on the core message: the world needs approximately 10 million additional tonnes of copper per year by 2035 to support the energy transition, but the pipeline of new mine supply simply doesn’t exist to meet that demand.
The Mine Development Gap
Opening a new copper mine takes, on average, 16 years from discovery to first production. The boom in exploration activity triggered by rising copper prices in 2021–2023 will not translate into meaningful new supply until the late 2020s at the earliest. The current project pipeline which includes expansions at existing operations is expected to add approximately 4 million tonnes per year by 2030. That still leaves a shortfall of 6 million tonnes annually by mid-decade.
“The numbers are unambiguous,” said a senior analyst at Wood Mackenzie. “Even if every project in the probable pipeline gets built on schedule which never happens we’re still short.”
Grade Decline Is Compounding the Problem
It isn’t just a lack of new mines existing mines are getting harder to operate profitably. The average copper ore grade at major producing mines has declined from 1.2% in 2000 to approximately 0.65% in 2026, according to CRU data. This means miners must process more rock to produce the same amount of copper, driving up energy consumption, water use, and per-unit production costs.
Chile, the world’s largest copper producer, is particularly affected. Grade declines at ageing pits like Escondida and Collahuasi have pushed costs higher even as copper prices have risen. BHP’s Escondida the single largest copper mine on earth has seen average grades fall from over 1.5% at peak to below 0.8% today.
What This Means for Prices
The structural supply deficit is the primary reason why consensus price forecasts have shifted sharply higher. Bank of America now targets copper at US$6.00/lb by 2028, while Goldman Sachs has a 12-month target of US$5.50/lb. Scotia Capital, in its June 2026 metals outlook, maintained a more cautious near-term view of US$5.00/lb but acknowledged the medium-term bull case is “increasingly difficult to argue against.”
| Institution | 2026 Target | 2028 Target | Bull Case |
|---|---|---|---|
| Bank of America | US$5.20/lb | US$6.00/lb | US$7.00/lb |
| Goldman Sachs | US$5.50/lb | US$5.80/lb | US$6.50/lb |
| Scotia Capital | US$5.00/lb | US$5.40/lb | US$6.00/lb |
| Wood Mackenzie | US$4.90/lb | US$5.60/lb | US$6.80/lb |
Canadian Producers in Focus
The supply squeeze is creating a significant tailwind for Canadian-listed copper producers. Teck Resources (TECK.B), whose QB2 mine in Chile is now ramping toward full capacity, stands out as one of the most significant new sources of copper supply from a TSX-listed company. Teck guided for 390,000–450,000 tonnes of copper production in 2026 a 40% increase over its 2024 output.
First Quantum Minerals (FM), despite ongoing challenges in Panama, has rebuilt production from its Zambian and Spanish operations. Ero Copper (ERO) a TSX-listed pure-play copper miner with assets in Brazil has attracted institutional attention as one of the few TSX names offering direct copper exposure without gold or diversified metals dilution.
For investors looking at junior names, the TSX-V has seen a notable uptick in copper exploration activity. Companies drilling in BC’s Golden Triangle, the Yukon, and northern Ontario are attracting capital that, a decade ago, might have chased gold instead.
The Bottom Line
Copper’s supply-demand imbalance is not a short-term story driven by inventory cycles or speculative positioning. It is a structural deficit created by a decade of underinvestment, falling ore grades, and a demand picture reshaped by electrification. For long-term investors, the case for copper exposure has arguably never been stronger though near-term volatility driven by Chinese demand fluctuations and macroeconomic uncertainty will continue to create entry and exit opportunities.
Boreal Markets and SmallCap Communications Inc. are not registered investment advisers.
Always conduct your own due diligence before making investment decisions.
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