HG · Metals / Water-Resource Supply Risk
Z32328 – HG Copper Chile Atacama Aquifer
Aquifer depletion under northern Chilean copper mines constrains flotation, tailings transport, and smelter cooling; the satellite measure of regional water storage leads copper price direction with a 60-day horizon.
At a glance
DORMANT · WAITING FOR SOU
Current reading
-0.346
Inverted 504-day z score of GRACE aquifer anomaly, tanh-bounded
SEASONAL STATE
DORMANT · WAITING FOR SOU
Signal state
Moderate NEG
13 trading days in current state
Phase
STRESS
Positive equals water stress, negative equals water surplus
Sample
24 years
Monthly GRACE and GRACE-FO since 2002, roughly 6,152 trading days
As of Nov 04, 2026. Updated nightly. · NEXT WINDOW SOUTHERN-HEMISPHERE WET SEASON, DECEMBER THROUGH MARCH
SIGNAL OVERVIEW
Approximately 15 percent of the world copper supply comes from a single arid region of northern Chile. Escondida, Collahuasi, Chuquicamata, Los Pelambres, Centinela, and Spence sit in the Atacama desert where rainfall averages below 20 millimeters a year. The mines run on water; one cubic meter per tonne of ore processed, plus dust suppression, tailings transport, and smelter cooling. When the aquifer runs low, production falls. NASA GRACE and GRACE-FO satellites have measured regional water storage every month since 2002. The composite inverts the anomaly so water stress reads positive. In November 2003 it peaked near plus 0.99 and copper rallied 38 percent in 60 days. In June 2017 it reached its surplus extreme near minus 0.99 and copper still rallied 18 percent, as China demand overrode the water signal. Today the composite reads -0.346, in Moderate NEG 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 band at the top marks the water-stress regime where aquifers are depleted relative to their 24-year baseline; this historically precedes copper rallies at a 60-day horizon. The pale band at the bottom marks water surplus, which historically precedes muted or negative copper forward returns. The bronze line in the middle panel is the trailing 252-day rolling Spearman IC of composite against copper forward 60-day returns. The lower panel is HG copper continuous back-adjusted price for market context.
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
Moderate Neg
STATE AND PERCENTILE
Moderate NEG, 13 trading days running. The composite at -0.346 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 -0.346, placing the dot inside the Moderate NEG band on the top panel. Watch the monthly GRACE release near the fifteenth of each month for the atomic input; intra-month moves are forward-fill artifacts, not new signal.
TOP INPUTS FIRING
- GRACE/GRACE-FO regional water anomaly Monthly satellite measurement of aquifer storage over the bounding box, in centimeters of liquid-water-equivalent.
- 504-day rolling z-score Two-year scale of the inverted anomaly relative to its own history.
- Market phase direction Direction of the current state run, 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 HG 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 | 44.2% (2722 d) | +6.23% | +3.07pp | Sep 2024, Sep 2023, Oct 2022 | |
| Normal | 0 | 17.3% (1067 d) | +3.71% | +0.55pp | Oct 2026, Feb 2026, Oct 2025 | |
| Water surplus TODAY | -1 | 38.4% (2363 d) | -0.71% | -3.87pp | Oct 2026, Apr 2026, Jan 2026 |
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 15 percent of global copper from mines that use one cubic meter of water per tonne of ore processed; when the aquifer underneath drops, flotation and tailings slurry transport constrain throughput. NASA GRACE and GRACE-FO satellites measure regional terrestrial water storage every month since 2002. The composite inverts the anomaly so stress reads positive, z-scores it over 504 days, and bounds through tanh.
Why it matters
Chilean copper mines in the Atacama use roughly one cubic meter of water per tonne of ore processed. When aquifers drop, flotation efficiency falls, tailings thicken, and smelter cooling constrains. The composite captures this on a 60-day horizon before production reports confirm.
Water stress above the plus 0.6 band is associated with copper fwd-60d returns well above baseline. Pair with physical-market indicators (LME copper stocks, TC/RC treatment charges) to confirm supply tightness is landing.
The 2017 surplus episode saw copper rally 18 percent despite the strongest water-release reading in the sample, as China stimulus drove demand. The signal is a supply-side read; macro-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 GRACE and GRACE-FO instrument design, the bounding-box methodology over the Chilean copper cluster, the three signature episodes (2003 rally launch, 2014 mega-drought climax, 2017 surplus extreme), and the four caveats on reading a monthly satellite signal as a daily tape. Includes the regime-conditional forward returns and the 60-day horizon 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 08:07 PM ET