Report published September 25, 2026
Metals Weekly: El Niño and Diesel Refocus Attention on Supply Risks; Copper Faces a Triple Threat
J.P. Morgan · September 25, 2026
J.P. Morgan highlights that copper faces a triple threat of supply risks from potential US diesel export bans, El Niño weather events, and Chilean strike votes at Escondida and Centinela. With concentrate markets exceptionally tight, prices exhibit bullish convexity toward an overshoot of $15,000/mt by year-end.
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Finvaulta summarizes J.P. Morgan's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.Copper faces a triple threat of supply disruptions: potential US diesel export restrictions to South America, El Niño weather extremes, and Chilean labor strikes.
- 2.Copper prices retain significant bullish convexity, with risks skewed toward an overshoot above $15,000/mt into year-end against an already strained supply-demand backdrop.
- 3.Chile and Peru rely heavily on the US for diesel (>70% and ~50-60% of demand respectively); while inventory buffers protect against a short 30-day ban, prolonged curbs would cut auxiliary operations and impair future mine production.
Table of Contents
- Copper faces a triple threat of supply risks and likely has the greatest convexity potential given the current S&D backdrop
- US Diesel export ban: Prolonged US export ban would eventually be a major supply risk for Chile and Peru with consequences likely reverberating well into the future
- Payback in 2027 and beyond likely if miners need to conserve diesel now.
- El Niño - Watch Ok Tedi now, storm risk in Chile and Peru persists
- Zambian production is exposed to drought risks from the power availability side.
- Chile and Peru face the opposite risk as El Niño brings the risk of excessive rainfall threatening disruptions to mine operations and logistical supply chains.
- Strike risk: 5% of global mine supply is on strike watch in the coming week
- Drought-induced NPI cuts in Indo are happening, but are not an S&D game changer for nickel yet
- Duration of cutback is the key, rainy season is around the corner.
- Stress on coal logistics mainly a cost headache for now.
- Yunnan hydro looks all right for now heading into dry season
- JPM metals price forecasts
Report data
JPM metals price forecasts: Quarterly and annual averages
| Metric | Estimate | Context |
|---|---|---|
| China copper concentrate imports | -3.0 % yoy | Shortages of raw materials are straining Chinese smelter economics. |
| China copper imported concentrate treatment charges (spot TCs) | -200.0 $/t | Straining Chinese smelter economics and risking refined production curtailments. |
| China onshore social inventory of refined copper | 73.0 kt | Very low level of inventory entering the Mid-Autumn Festival. |
| US share of Chile diesel demand | 70.0% | The US supplies more than 70% of Chile's diesel demand. |
| Mining share of Chile national diesel consumption | 21.0% | Mining accounts for a large share of overall diesel consumption in Chile. |
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