Copper: El Niño risks cap African supply growth – Societe Generale
Societe Generale’s Commodity Compass, authored by Michael Haigh and Jeremy Sellem, highlights how El Niño 2026-2027 could constrain copper output in the African Copperbelt. With hydropower providing most electricity in the DRC and Zambia, the report warns that drought-driven power shortages and already slowing mine growth may leave Copperbelt production flat at best through H1 2027 before improving later.
El Niño threatens Copperbelt expansion
"El Niño Could Stall Copper Supply Growth in 2027. Major El Niño episodes have consistently coincided with weaker Copperbelt production. Output declined in the DRC in 2016 and in Zambia in 2019 and 2023, while growth stalled in 2015."
"Today, the RONI index is approaching 1997-98 levels, making the current episode one of the strongest on record. We estimate rainfall could fall 30cm below last year while temperatures rise almost +1°C, putting additional pressure on river levels and hydropower generation."
"Consensus expects copper output growth of +200 kt in the DRC and +70 kt in Zambia this year, yet year-to-date trends point to only +90 kt and +20 kt, respectively. With the climate anomaly likely to remain elevated through H1 2027, we believe Copperbelt production growth could be flat at best before conditions begin to improve from Q3 2027 onward."
"Looking into H1 2027, we expect the RONI anomaly to remain above +0.5°C, as observed in both 1998 and 2024. If history is any guide, this would leave copper production flat at best on a year-on-year basis. Conditions should start improving from Q3 2027 onwards as the climate anomaly fades."
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