Bank of America (BofA) raised its forecasts for 2026 and 2027 copper prices amid supply concerns and noted that demand is rebounding in Europe and set to stabilise in China .

The bank raised its copper price outlook for next year to $11,313 per ton from $10,188 and for 2027 to $13,500 per ton from $12,000.

Last week, Freeport-McMoRan declared force majeure at its Grasberg mine in Indonesia and said it is expecting consolidated sales to be lower for copper in the third quarter. Grasberg is the world’s second-largest copper mine after Escondida in Chile.

“The issues at Freeport’s Grasberg mine alone could increase next year’s deficit by 270,000 tons,” said BofA in a note dated Sunday. It added that this year’s mine supply is likely to fall short of nearly every forecast made over the past 15 years.

BofA said its real-time demand tracker shows European demand bottoming out, signalling gradual economic improvement, while demand in top consumer China is expected to stabilise.

Data showed that China’s industrial profits returned to growth in August even as businesses braced for a broader economic slowdown.

The note also flagged that London Metal Exchange warehouses have been running dry for some time, with the shortage worsening as spare tonnages were diverted to the U.S. ahead of expected trade restrictions that ultimately didn’t materialise.

“The tonnages in the U.S. are held under warehouse financing deals, so will in all likelihood only become available, when the market pays up. All this also raises the risk of periodic short squeezes on LME, which could push nearby prices violently higher,” it added.

In July, the U.S. announced a 50% tariff on copper pipes and wiring but details of the levy fell short of the sweeping restrictions expected and left out copper input materials such as ores, concentrates and cathodes.

Benchmark three-month copper HG1! on the LME added 2.3% to $10,411 a metric ton as of 14:21 GMT.