Copper supply alarm sounded! Glencore’s 2025 output plunges by 11%, declining ore grade becomes a “hard blow”

Glencore announced on Thursday that the company’s copper production for 2025 is 851,600 tonnes, an 11% year-on-year decrease and at the lower end of its previously forecast range. Although ore grades and recovery rates improved at several mines in the second half of the year, leading to a rebound in production, the overall annual performance remained constrained. More notably, Glencore has lowered its copper production guidance for 2026 to between 810,000 and 870,000 tonnes, with the midpoint of 840,000 tonnes representing a significant downgrade from the previous forecast of 930,000 tonnes. The adjustment is mainly attributed to declining ore grades at its Collahuasi mine in Chile and local water resource limitations. At the same time, the company is currently in negotiations with Rio Tinto regarding the potential merger of part or all of its business, which includes Rio Tinto Group possibly acquiring Glencore through an all-share deal. If the transaction goes through, it will create the world’s largest mining group with a market value exceeding $200 billion and copper production accounting for nearly 10% of global supply, profoundly impacting the medium- and long-term supply structure of the copper market and global industry competition. Copper Prices Reach Historical Highs, Glencore Accelerates 2035 Production Targets Driven by the global low-carbon transition, expansion of AI infrastructure, and demand from the defense industry, copper prices have risen to historical highs. The market generally expects further tightening on the supply side, supporting the strong price trend. Glencore, one of the world’s leading copper producers, saw a decline in 2025 output mainly due to lower ore grades and recovery rates, which are directly related to phased adjustments in mining schedules. To meet long-term demand growth, Glencore plans to increase its annual copper output to 1.6 million tonnes by 2035 by combining new mine development and mine restarts, thus reinforcing its position in the critical minerals supply chain. Production Pressure on Key Minerals Glencore's latest production data show that its output for cobalt—a key metal for energy transition—has declined. Last year, the company produced 36,100 tonnes of cobalt, a 5% decrease compared to the previous year. This business is concentrated in the Democratic Republic of Congo, which supplies more than 70% of global cobalt resources. Notably, the country implemented a cobalt export quota system starting October last year. Glencore expects to export 22,800 tonnes of cobalt this year. The company's other major metal outputs showed mixed results: gold production fell 18% year-on-year; due to the acquisition of Elk Valley Resources, steelmaking coal output surged 63% to 32.5 million tonnes; zinc production stood at 969,400 tonnes. In addition, although thermal coal production for 2025 is expected to fall slightly to 98 million tonnes, Glencore remains a leading global thermal coal producer and exporter. Risk Disclosure and Disclaimer The market carries risks and investments should be made with caution. This article does not constitute personal investment advice and does not take into account individual users' specific investment objectives, financial circumstances or needs. Users should consider whether any opinions, views, or conclusions in this article suit their particular situations. Investments made accordingly are at your own risk.