Goldman Sachs Revises Copper Forecast After Grasberg Mine Disruption

Goldman Sachs has slashed its copper supply projections following operational disruptions at Indonesia's Grasberg Mine, now forecasting a 55,500-ton deficit for 2025. The revision marks a stark reversal from earlier surplus expectations, underscoring the impact of Freeport-McMoRan's force majeure declaration on global commodity markets.

The September 8 incident, involving trapped workers due to mudflow, has removed 525,000 metric tons from Goldman's supply calculations. The affected mine represents the world's second-largest copper source, with analysts noting the production loss exceeds typical allowances for global supply shocks. Mine production growth estimates for 2025 have been cut to 0.2% from 0.8%.

Grasberg's output is expected to decline by 250,000-270,000 tons annually through 2026, with only 30-40% of capacity coming online mid-quarter during the restart phase. The supply constraints come as institutional investors increasingly view industrial metals as inflation hedges, creating potential cross-asset implications for cryptocurrency markets.