Antofagasta (LSE:ANTO,OTCPL:ANFGF) has slashed its annual copper guidance following historic winter storms at its flagship mine in Chile, compounding a global supply squeeze that has pushed prices to record highs.
The company lowered its 2026 copper output forecast to between 625,000 and 655,000 metric tons in an August 13 release, down from an initial target of 650,000 to 700,000 metric tons.
The downgrade follows an orderly shutdown at the high-altitude Los Pelambres operation, announced on July 24 due to extreme rain and snow. The severe weather prompted the Chilean government to declare a state of catastrophe in the semi-arid Coquimbo region.
Despite the operational setback, higher realized copper prices drove a 27 percent year-on-year increase in Antofagasta’s H1 earnings before interest, taxes, depreciation and amortization.
Copper prices reach record highs
The output cut coincides with historic copper price surges across global metal exchanges.
On August 7, Comex copper futures reached an all-time record of US$6.77 per pound, breaking the previous peak set in May. On the London Metal Exchange (LME), three month copper contracts reached US$14,258 per metric ton that day, approaching the LME all-time record of US$14,527.50 ton set on January 29.
DRC ban drives copper supply squeeze
Adding to the supply anxiety in the market, the Democratic Republic of Congo (DRC) imposed an immediate export ban on copper and cobalt concentrates on August 6. While Kinshasa aims to force domestic processing, the directive rattled a market that is already sensitive to supply chain disruptions.
Smelter processing fees have already turned negative amid fierce competition for concentrate.
LME warehouse stocks plunged from 401,000 metric tons in early May to 214,550 metric tons, with 58 percent held as canceled warrants awaiting physical load out. These supply constraints are colliding with concentrated demand spikes from artificial intelligence data centers, electrification and power grid modernization.
China increased its grid investment by 13 percent year-on-year in the first half of 2026 as part of a US$574 billion infrastructure plan. Concurrently, global supply faces tightening from 50 percent US Section 232 tariffs on semi-finished copper imports and Chinese scrap restrictions.
“The underpinning story of elevated copper prices has been data center and power grid demand to support the rapid AI industry expansion,” William Osnato, director of commodity data research and analysis at Barchart, told CNBC.
As global supply chains scramble for physical metal, Osnato added, “It is definitely a new situation for Dr. Copper.”
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.