By Penny Langford
The global transition to a low-carbon economy has long been predicated on the steady, affordable flow of copper. However, a new and unsettling variable has entered the equation. The International Energy Agency (IEA) has issued a stark warning in its Global Critical Minerals Outlook 2026, stating that the short- to medium-term supply outlook for copper has "worsened considerably."
While market analysts have traditionally focused on declining ore grades and labor strikes at major pits, the current crisis stems from an "invisible" catalyst: a severe global shortage of sulphuric acid. This reagent, essential for the Solvent Extraction and Electrowinning (SX-EW) processing used in nearly half of the Democratic Republic of Congo's (DRC) output, has become the new chokepoint for the energy transition.
The IEA's "Considerable" Supply Warning
The IEA report highlights a rapid deterioration in market stability. Just eighteen months ago, the agency projected a manageable tight market for the mid-2020s. Today, that projection has shifted toward a structural deficit. Refined copper consumption rose to nearly 28 million tonnes in 2025: a 3.7% year-on-year increase: and is projected to grow by more than 25% by 2040.
The agency notes that the investment landscape is failing to keep pace. Despite record-high prices in early 2026, capital expenditure on new "greenfield" projects has stagnated. Operators are instead pivoting toward brownfield expansions, which offer quicker returns but do little to address the widening long-term gap. The IEA now warns that without a massive influx of new production, the market could remain severely undersupplied through 2035.
The Sulphuric Acid Chokepoint: Hormuz and China
The current supply crunch is not merely a mining problem; it is a chemical and geopolitical one. Two concurrent events in 2026 have paralyzed the sulphuric acid market, a critical input for hydrometallurgical copper production.
First, the February disruption in the Strait of Hormuz halted approximately 50% of the global seaborne sulphur trade. Sulphur, a byproduct of oil and gas refining in the Middle East, is the primary feedstock for sulphuric acid. With the primary maritime artery blocked, shipments to major refining hubs in Asia and leaching operations in Africa slowed to a trickle.
Second, China: the world’s largest producer of sulphuric acid: instituted a sudden export ban in May, set to last through the end of 2026. Beijing’s move was ostensibly to protect its domestic fertilizer industry and its own copper smelting operations, but the international impact was immediate.
"The acid squeeze is the most significant 'non-mining' disruption we have seen in decades," says one senior industry analyst. "You can have all the ore in the world, but if you cannot leach it, it stays in the ground."
Regional Fallout: DRC and Chile in the Crosshairs
The regions most exposed to this chemical shortage are the Democratic Republic of Congo and Chile. In the DRC, approximately 45% of copper production relies on acid leaching. The IEA estimates that 1.5 million tonnes of leached output in the DRC are currently at risk due to the acid shortage. This comes at a sensitive time for the region, where infrastructure and security concerns, such as those seen in Pakistan's recent copper crisis, already weigh heavily on the global supply chain.
In Chile, the world's top copper producer, the risk is slightly different but equally acute. While Chile has a more diversified processing base, its aging oxide deposits: which require leaching: are seeing costs skyrocket. Approximately 1.2 million tonnes of Chilean output are considered vulnerable to the current acid price spikes and supply interruptions.
For operators, the choice is stark: pay triple for spot-market acid or curtail production. For many mid-tier miners, the latter is becoming the only viable option.
China’s Strategic Pivot and the Smelter Squeeze
While the world's leaching operations struggle for acid, the smelting sector is facing its own crisis. China’s top copper smelters, which process the majority of the world’s copper concentrates, have announced production cuts of more than 10%.
The reasons are twofold: tight supply of copper concentrates and the domestic prioritization of sulphuric acid. Furthermore, the IEA reports that approximately 2 million tonnes of planned new smelting capacity in China and Southeast Asia have been halted or delayed. This bottleneck in refining means that even if mine-site production remains stable, the world may lack the capacity to turn that ore into the refined cathode required for EVs and power grids.
| Metric | 2025 Actual | 2026 Forecast (Base Case) | 2026 Forecast (Bear Case) |
|---|---|---|---|
| Refined Copper Demand | 27.9M Tonnes | 28.8M Tonnes | 28.8M Tonnes |
| Global Mine Supply | 22.4M Tonnes | 21.8M Tonnes | 20.9M Tonnes |
| Market Balance | -0.2M Tonnes | -0.6M Tonnes | -1.5M Tonnes |
| Sulphuric Acid Price Index | 100 (Base) | 240 | 380 |
Copper Price Forecast 2026: Drivers and Risks
The convergence of these factors has fundamentally shifted the copper price forecast 2026. Investors and operators must now navigate a "three-scenario" market dominated by logistical and chemical risks.
- Base Case: Copper prices stabilize between $10,500 and $11,500 per tonne. This assumes a partial resolution to the Hormuz shipping delays by Q3 and a gradual easing of Chinese export restrictions.
- Bull Case (Supply Shock): If the acid shortage persists and DRC production drops by the full 1.5 million tonnes at risk, prices could surge toward $13,500 per tonne. This scenario assumes further militant disruptions at major mines and continued smelter cuts in China.
- Bear Case (Demand Destruction): Prices could retreat to $9,000 per tonne if high costs lead to significant demand destruction in the automotive and construction sectors. However, given the non-discretionary nature of copper in the energy transition, most analysts view this as unlikely.
Operational Adaptation: The New Normal
To mitigate these risks, mining companies are increasingly looking at mine electrification and technological upgrades to lower operating expenses elsewhere in the value chain. Some Tier-1 miners are also investigating on-site sulphuric acid plants that capture sulphur dioxide from smelting or roast local pyrite: effectively "insulating" themselves from the seaborne sulphur market.
Conclusion: The Long-Term Deficit
The IEA's 2026 outlook is a wake-up call. The copper deficit impact 2026 is not a temporary blip but the beginning of a structural shift. The "Sulphuric Acid Crisis" has exposed the fragility of a supply chain that depends as much on chemical reagents and maritime security as it does on the ore in the ground.
As we look toward 2035, the requirement for copper will only intensify. Whether through increased recycling, the development of new leaching technologies that use less acid, or a massive geopolitical realignment of the sulphur trade, the industry must adapt. For now, the focus remains on 2026: a year where the "red metal" may find its greatest challenge is not the mine, but the pipeline.
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The IEA’s 2026 Outlook is out, and the news for copper isn't good. A "worsened considerably" supply outlook, driven by a global sulphuric acid crisis and the Strait of Hormuz disruption, has put 2.7M tonnes of output at risk in the DRC and Chile. With China cutting smelter capacity and demand rising 3.7%, the 2026 copper deficit is looking sharper than ever. Read our deep dive on what this means for prices and the energy transition. #Copper #Mining #EnergyTransition #IEA #CriticalMinerals
