Why Chile Raised Its 2026 Copper Price Forecast to $5.55 per Pound

1. The energy transition and electrification

The global shift toward cleaner energy systems requires large amounts of copper for renewable power systems, transmission lines, and grid upgrades. Electrification projects—from solar installations to battery storage and power networks—depend heavily on copper wiring and electrical components.

Because these infrastructure investments are long‑term and global, they are expected to support sustained copper demand growth through the late 2020s.

2. Electric vehicles

Electric vehicles contain significantly more copper than conventional internal‑combustion cars because of their motors, batteries, and charging systems. As EV adoption expands worldwide, it adds another structural source of copper demand.

3. AI infrastructure and data centers

The rapid expansion of artificial‑intelligence infrastructure is emerging as another copper‑intensive sector. Large data centers and the electricity networks that power them require extensive copper in cooling systems, power distribution equipment, and high‑capacity electrical connections.

Together, these trends create what analysts often call “structural demand”—long‑term consumption growth driven by technological and energy transitions rather than short‑term economic cycles.

How Cochilco’s forecast changed over the past year

The latest projection is the result of several upward revisions as market conditions tightened:

• Late 2024 outlook: around $4.25 per pound for 2026.
• Late 2025 revision: raised to about $4.55 per pound amid supply concerns.
• April 2026 update: lifted further to $4.95 per pound.
• May 2026 outlook: sharply increased again to $5.55 per pound, the highest forecast yet.

The steady upgrades reflect stronger demand expectations and growing evidence that copper supply growth will be slower than previously assumed.

Chile’s production challenges are tightening supply

Chile accounts for roughly a quarter of global mined copper supply, so changes in its output have a major impact on world markets. Recent data shows several pressures affecting production.

Cochilco now expects Chile’s copper output to fall about 2% in 2026 to roughly 5.3 million metric tons, partly due to declining ore grades and operational challenges at mines.

Additional indicators highlight the slowdown:

• Chile’s first‑quarter 2026 copper output dropped 6% year‑over‑year, the weakest first quarter in nine years.
• Falling ore grades and maintenance work are weighing on production at several major mines.

Lower ore grades mean more rock must be processed to produce the same amount of metal, increasing costs and slowing output growth across Chile’s mining sector.

A tight global copper balance

Beyond Chile, analysts increasingly expect global copper supply to struggle to keep up with demand growth. Cochilco has pointed to a refined‑copper deficit of about 124,000 metric tons in 2025, with the market only barely moving toward balance afterward.

At the same time, copper prices have already been trading near historic highs. Futures hovered around $6 per pound in early 2026, reflecting strong demand expectations and supply concerns.

Why forecasts still differ

Despite the bullish outlook from Cochilco, analysts and banks remain divided on the medium‑term price path.

Some institutions expect continued tightness in the market, while others warn that macroeconomic risks or a future supply increase could push prices lower later in the decade. For example, research from J.P. Morgan notes that copper prices could weaken under bearish global economic scenarios.

This divergence explains why copper’s outlook is often described as bullish but volatile.

The bottom line

Cochilco’s sharp upgrade to $5.55 per pound for 2026 reflects a market being reshaped by structural forces. Demand from electrification, electric vehicles, and AI infrastructure is rising quickly, while supply—especially in Chile—is constrained by declining ore grades, mine maintenance, and weaker output growth.

If these trends persist, copper could remain one of the most strategically important—and tightly supplied—metals of the energy‑transition era.