UBS has increased its copper price forecasts, underlining a fundamentally stronger outlook driven by constrained supply and resilient demand related to the energy transition, even as short-term demand indicators remain uneven.
The investment bank raised its 2026 copper forecast by 13% and adjusted its projections for 2027 and 2028 upward by 4% and 3% respectively, targeting $6.00 per pound - equivalent to $13,200 per tonne. UBS also increased its long-term price view by 10%, now projecting $5.50 per pound.
Markets have reflected renewed interest in copper. Prices on the London Metal Exchange have rebounded toward record territory, trading above $13,000 per tonne after a brief pullback that followed the outbreak of the Middle East conflict. Both physical trading activity and paper market positions, along with investor appetite for copper-related equities, have shown renewed engagement.
UBS highlighted ongoing operational issues at a number of major mining projects, citing disruptions and downgrades at operations that include Kamoa-Kakula and Grasberg. The bank argued that volatility in energy prices is likely to reinforce investment into renewables, grid expansion and reshoring initiatives - trends it views as supportive of medium-term copper demand.
Using its supply and demand model, UBS indicates the copper market is poised to move into a deficit over time. The bank expects that tighter physical market conditions and continued inventory drawdowns will underpin higher prices. At the same time, UBS cautioned that the market is not currently in an extreme state of tightness and that demand signals are mixed.
One key nuance in UBS's assessment is the divergence between mine and smelter output. While mine production faces pressure from disruptions, smelter output has so far remained resilient. That dynamic, UBS said, could delay the emergence of a clear physical deficit because inventories provide a buffer that would need to be reduced before acute tightness is observed.
UBS also noted that persistently elevated copper prices will likely increase incentives for thrifting and substitution. The bank views this effect as a balancing factor in the near term following recent price gains.
Clear summary
UBS lifted near- and medium-term copper forecasts, citing supply interruptions at key mines and sustained demand from the energy transition, while warning that robust smelter output and mixed demand indicators mean a pronounced physical deficit is not imminent.