Freeport-McMoRan(US:FCX) Benzingaยท2025-09-26 10:33Core Insights - The copper market is experiencing significant disruptions due to incidents at Indonesia's Grasberg mine, leading to revised supply forecasts and price expectations [1][5]. Supply Disruptions - The Grasberg mine, which typically contributes around 3% of global copper production, has declared force majeure following a heavy mudflow incident that resulted in fatalities and missing workers [3][4]. - Freeport-McMoRan expects minimal production in Q4 2025, with only 30%-40% of capacity likely to restart by mid-quarter, and full production may not resume until 2026, resulting in a potential 35% reduction from earlier forecasts [4][6]. Price Forecasts - Goldman Sachs has revised its copper supply outlook, estimating a total loss of 525,000 tons across 2025 and 2026, flipping its 2025 copper balance from a surplus of 105,000 tons to a deficit of 55,000 tons [5][6]. - The bank now anticipates copper prices could rise to $10,200-$10,500 per ton by December 2025, with an average of $10,750 per ton expected by 2027 [6]. Market Reactions - Following the incident, Freeport's shares dropped nearly 17%, marking the steepest one-day decline since March 2020, and the stock is down over 20% for the week [6]. - Analysts from different institutions have varying forecasts, with ING predicting an average of $9,837 per ton in 2026, while J.P. Morgan is more conservative, projecting $9,400 per ton in Q1 2026 [7]. Broader Market Trends - The copper market is facing tightening supply due to unplanned disruptions, which affected 5.7% of global copper output in 2024 and are expected to exceed 6% in the current year [8]. - The fragility of supply chains has been highlighted by the Grasberg incident, emphasizing copper's critical role in electrification and the significant impact of even small supply deficits [9].