Chile, the biggest copper-producing country, raised its price projections for the metal this year and next on easing trade-war tensions and supply disruptions that signal the market is swinging into deficit.

The government’s copper commission, Cochilco, expects prices to average $4.30 a pound this year and next, compared with its previous forecast of $4.25 for both years, according to a report Wednesday.

The quarterly projections were delayed to give officials more time to analysis the metal’s wild ride of late. Trading just below $4.70 a pound now, US futures surged to records above $5.20 in late March amid a rush to get metal into the US ahead of tariffs, before tumbling below $4.20 two weeks later as the Trump administration unveiled a raft of levies.

With the US and China entering a a 90-day tariff truce, the trade outlook has improved somewhat, according to the report. Cochilco sees global copper demand growing 2.3% this year.

The mining industry is giving further support to prices, with world supply now seen expanding just 1.3% this year, down from a previous call of 4.7%. Freeport-McMoRan, Glencore and Anglo American all recorded production declines in the first quarter of 2025.

Chile, which accounts for about a quarter of mined copper, is part of the supply-side disappointments. Cochilco now predicts Chile’s annual output will grow 3% this year and next, slower than previously thought.

The world’s copper mines churned out about the same amount last quarter as a year earlier, but it was down 11.5% from the previous quarter on seasonal factors, according to a Jefferies report based on companies it covers. Supply growth is likely to continue to be slow due to deteriorating ore quality, analysts including Christopher LaFemina wrote.

At the same time, “there is risk of further demand volatility in the near term due to cyclical factors, but we continue to be bullish over the medium term, given growing global demand and serious supply constraints,” the Jefferies analysts wrote in the note, dated Wednesday.