Chile Bumps Up Copper Price Forecast and Flags Lagging Collahuasi Output

Chile, the world's leading copper supplier, has revised its copper price forecast upward for 2025. The government now projects an average price of $4.28 per pound, representing an increase from its previous estimate of $4.26 per pound. This adjustment reflects ongoing market dynamics and global demand patterns affecting the red metal.

Finance Minister Mario Marcel presented this updated outlook to Congress on July 23, 2025, highlighting how shifting market fundamentals continue to support stronger pricing despite operational challenges at key mining assets.

Key Factors Influencing the Updated Forecast

Global supply constraints across major producing regions, particularly in central Africa and parts of South America

Continued robust industrial demand despite economic headwinds in manufacturing sectors

Market anticipation of upcoming trade policy changes, especially U.S. tariffs

Declining inventory levels across major exchanges like the LME and COMEX

Increasingly bullish investor sentiment toward industrial metals critical to energy transition

The government's willingness to revise its forecast upward, even marginally, signals confidence in copper's fundamental outlook despite operational challenges in the domestic mining sector.

What's Happening at the Collahuasi Mine?

Production Challenges at a Critical Copper Asset

During his congressional presentation, Finance Minister Marcel specifically highlighted production issues at the Collahuasi mine as a significant concern affecting the mining sector's contribution to economic growth. This major copper operation, jointly operated by Glencore and Anglo American, has experienced a notable decline in output in recent months.

The mine, located in Chile's copper-rich northern region, ranks among the world's largest copper operations with historical production exceeding 565,000 tonnes annually. Its strategic importance to both the companies and Chile's economy makes any production disruption particularly significant.

Operational Impact Assessment

Production volumes have moderated significantly compared to previous operating periods

The underperformance represents a material deviation from projected output targets

Ripple effects throughout Chile's mining sector are impacting supply chain operations

Technical challenges may include declining ore grades in certain extraction zones

Recovery timeline remains uncertain, with companies yet to provide comprehensive guidance

Industry analysts note that water management has been an ongoing challenge at Collahuasi, with previous disruptions in 2021 linked to water scarcity issues. The high-altitude operation faces unique operational challenges that can impact production efficiency and recovery rates.