HG · Metals / Water-Resource Supply Risk
Z20917 – HG Chile Water Stress Copper Supply
Chilean Atacama precipitation and soil-moisture anomalies drive mine-site water availability; the combined satellite stress index leads copper price direction with a multi-month horizon.
At a glance
DORMANT · WAITING FOR SOU
Current reading
+0.073
Combined CHIRPS and SMAP stress z over Atacama copper belt, tanh-bounded
Signal state
Chile Normal
522 trading days in current state
Phase
NEUTRAL
Positive equals water stress, negative equals water favorable
Sample
36 years
CHIRPS since 1981 and SMAP since 2015; roughly 9,022 trading days in live window
As of Nov 04, 2026. Updated nightly. · NEXT WINDOW SOUTHERN-HEMISPHERE WET SEASON, DECEMBER THROUGH MARCH
SIGNAL OVERVIEW
Chile produces about 28 percent of global copper, almost all from the Atacama desert mining belt. Escondida, Collahuasi, Chuquicamata and the smaller operations each consume more than a cubic meter of water per tonne of ore processed. When Chilean precipitation falls below the long-term baseline and soil moisture dries, aquifers deplete and mine throughput follows on a multi-month lag. This signal combines two NASA satellite products: CHIRPS 12-month precipitation z-score and SMAP soil moisture anomaly z-score, both bounded over the Atacama copper belt. The combined stress index is smoothed, inverted (drought reads positive), and bounded through tanh. In September 2009 the composite peaked at plus 0.98 as the Chilean mega-drought began; copper rallied strongly into 2010-2011. In December 2015 the composite reached its series minimum minus 1.00 during the strong 2015-16 El Nino wet pattern. Today the composite reads +0.073, in Chile Normal territory.
LIVE CHART
24 years of Chile Atacama aquifer anomaly, read as water-stress regime for copper.
The dark line in the top panel is the composite, bounded between minus one and plus one. The pale red band at the top marks the water-stress regime where Atacama precipitation is well below baseline and soil moisture is low; this has historically preceded copper rallies at a 60-day horizon. The pale green band at the bottom marks water-favorable conditions. The bronze line in the middle panel is the trailing 252-day rolling Spearman IC against copper forward 60-day returns. The lower panel is copper continuous back-adjusted price for context on the right axis in cents per pound.
COMPOSITE
+0.021 / tanh
STATE
Normal
PHASE
0
FWD 60d
+3.10% (baseline +2.32%)
SAMPLE N
8,764 days
TODAY’S PLAYBOOK READING
STATE
Chile Normal
STATE AND PERCENTILE
Chile Normal, 522 trading days running. The composite at +0.073 is in the band mapped by the engine.
WHY THE SIGNAL IS HERE
Regional aquifer storage over Chile’s copper-mining Atacama / Antofagasta region is at the level the engine has mapped to this state. The composite is a 63-day-smoothed, inverted-sign, 24-month z score, so the current reading reflects regional water balance against the trailing two-year baseline.
POSTURE FOR THE WEEKS AHEAD
Historical pattern is strongly as-is positive. State spread extreme-pos versus extreme-neg is plus 7.00 percentage points at 60d. The signal is strategic, not tactical.
WHAT THE CHART SHOWS
Today the composite reads +0.073, placing the dot inside the Chile Normal band. CHIRPS updates on a 2-3 day lag at daily cadence; SMAP updates roughly daily. Watch for sustained declines in CHIRPS precipitation over the Chilean belt as the leading indicator of a new drought cycle.
TOP INPUTS FIRING
- CHIRPS 12-month precipitation z Rolling-year precipitation anomaly over the Atacama copper belt from satellite plus station data.
- SMAP soil moisture anomaly z Near-surface soil moisture anomaly from NASA SMAP mission.
- Market phase direction Direction of the current state run, taken from the engine Market_Phase_Int column.
THE REGIME MAP
The three regime states, forward returns and sample share
Behavior across the three states computed from 8,764 engine trading days, with HG-conditional statistics against the 8,704-day subset where fwd 60d is observable. Baseline copper forward-60-day return (unconditional): plus 2.17 percent, median plus 1.56 percent, standard deviation 12.99 percent, percent negative 44.1 percent. State values from engine data, no fabrication.
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| Water stress | +1 | 43.5% (3921 d) | +1.86% | +0.74pp | Jul 2024, Feb 2021, Feb 2021 | |
| Normal TODAY | 0 | 23.0% (2079 d) | +2.61% | +1.49pp | Oct 2024, Dec 2023, Feb 2023 | |
| Water favorable | -1 | 33.5% (3022 d) | -0.83% | -1.96pp | Jun 2023, Feb 2019, Mar 2015 |
The historical pattern
24 years of Chile Atacama aquifer reading water-stress for copper
THE TRACK RECORD
Every state change in the last 2 years
Full state-transition history (several dozen transitions since 2002) is downloadable. The recent 2-year window shows the regime cadence into the current reading.
| State | Start | End | Duration | Fwd 60d COMEX HG |
|---|---|---|---|---|
| Extreme Pos Water Stress | 10/28/2024 | 02/20/2025 | 79d | +3.19% |
| Neutral | 02/21/2025 | 03/17/2025 | 17d | -0.85% |
| Extreme Neg Water Surplus | 03/18/2025 | 10/02/2025 | 138d | +7.62% |
| Neutral | 10/03/2025 | 12/31/2025 | 62d | +2.66% |
| Extreme Neg Water Surplus | 01/02/2026 | 02/27/2026 | 39d | -4.81% |
| Neutral | 03/02/2026 | 03/16/2026 | 11d | +9.34% |
| Extreme Neg Water Surplus | 03/17/2026 | 03/17/2026 | 1d | +9.98% |
| Neutral | 03/18/2026 | 04/23/2026 | 26d | +12.14% |
| Extreme Neg Water Surplus | 04/24/2026 | 09/16/2026 | 100d | +4.69% |
| Neutral | 09/17/2026 | 10/26/2026 | 28d |
Scroll inside the table for the full history. Forward 60-day COMEX HG is measured from each run’s start date; a reader cannot trade off a start-date they only identify in hindsight, so this is a transparency log, not an alpha claim. Asterisked (*) returns are partial. The run is less than 60 trading days old. The full 60-day comparable fills in as more data arrives.
What this measures
Chile produces roughly 28 percent of global copper from the Atacama desert mining belt; the mines consume one cubic meter of water per tonne of ore processed. Water supply tightness constrains throughput. The signal combines two NASA satellite products: CHIRPS 12-month precipitation z-score and SMAP soil moisture anomaly z-score, both over the Atacama copper belt. The combined stress index is smoothed, inverted so drought reads positive, and bounded through tanh.
Why it matters
CHIRPS captures above-ground precipitation; SMAP captures near-surface soil moisture. Together they measure the water supply that Atacama mines depend on. The two-input design catches regime changes that either single-input signal would miss.
Water-stress state above the plus 0.5 band has historically preceded copper fwd-60-day returns well above baseline. Pair with physical-market indicators (LME copper stocks, concentrate TC/RC charges) to confirm supply tightness is landing.
The 2015-16 wet anomaly correctly flagged water-favorable, but copper was already weak on the China slowdown. The signal is a supply-side read; demand shocks can dominate at any horizon.
GO DEEPER
What the Chile Atacama Aquifer composite actually tells you (and what it does not)
The brief covers the CHIRPS and SMAP instruments, the Atacama bounding-box aggregation, three signature episodes (2009 mega-drought start at series max, 2015-16 El Nino wet anomaly at series min, 2022-present continued stress), and four caveats on reading a combined satellite signal as a daily copper tape. Includes regime-conditional forward returns and the IC decomposition.
Signal consumers and siblings
Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Nov 05, 2026 08:47 PM ET