UBS raises copper outlook as mine disruptions deepen supply deficits
UBS said that it expects the copper price to increase into next year. The bank cited tightening supplies due to mine disruptions, and a strong demand for clean energy and electrification.
UBS's updated projections show that its March 2026 forecast price was increased by $750 to $11,500 per metric ton. It also raised its targets for June and September 2026 by $1,000 each to $12,000 and $12,500 respectively. A new target of $13,000 a ton per month has been introduced in December 2026.
UBS has also increased its forecasts for market deficits, stating that falling inventories will continue to keep the conditions tight.
Bank of America said that mine disruptions, such as production problems at Freeport McMoRan’s Grasberg Mine in Indonesia, slower recovery in Chile and recurring protests throughout Peru, underscore structural supply restrictions which are likely to continue into 2026.
Freeport-McMoRan announced last week that it would restore production to Indonesia's Grasberg gold and copper mine by July, after a fatal accident forced operations to be halted two months ago.
UBS has lowered its estimates for the growth of refined copper production to 1.2% in 2025 and 2.2% in 2026. The company cited grade declines and operational difficulties.
The demand for copper is expected to increase by 2.8% between 2025 and 26. This growth will be driven by the electric vehicle, renewable energy, investment in power grids, and data centres.
The bank stated that any price weakness would be temporary and advised remaining long in copper or using volatility selling strategies.
The Shanghai Futures Exchange's most active copper contract SCFcv1> ended daytime trading up 0.09% to 86,080 Yuan ($12,112.68) a metric tonne. Reporting by Sherin Varghese, Bengaluru. Editing by Emelia Matarise.
(source: Reuters)
