UBS says copper’s long-term bullish cycle is taking shape, setting the stage for additional price strength in the year ahead.
In a recent research note, the bank reiterated its conviction that copper is the standout opportunity within industrial metals and a major factor behind its decision to upgrade its commodities view.
“Copper remains our top pick among industrial metals and is a key driver behind our upgrade of commodities to ‘Attractive’ from ‘Neutral.’” the analysts wrote.
UBS emphasized copper’s central role in the global economy, particularly as demand accelerates from electrification initiatives, renewable energy expansion, and rapidly growing data-center power needs. These trends underpin a long-term consumption outlook that the bank expects to strengthen further.
“We therefore now expect global copper consumption to grow by 2.8% in both 2025 (up from 2.2%) and 2026 (down from 2.9%). We see some downside risks to our demand forecasts, as higher copper prices may curb demand,” the note continued.
The bank raised several of its 2026 price targets, including a $750/mt increase to its March estimate and a $1,000/mt upward revision to its June and September forecasts, now set at $12,000/mt and $12,500/mt. UBS also introduced a fresh December 2026 target of $13,000/mt.
“We favor selling downside price risk or maintaining a long position in the metal,” UBS said.
Copper futures were up 1.8% to $10,949/mt as of 08:30 ET (13:30 GMT), bringing year-to-date gains close to 25%.
On the supply front, UBS expects constraints to continue into 2026. Output recovery hinges on large operations such as Grasberg and Ivanhoe’s Kamoa-Kakula, while grade deterioration at Chile’s Collahuasi remains a drag. Peruvian production has shown improvement, rising 2.7% year-over-year from January to August.
UBS trimmed its expectations for refined copper production growth to 1.2% for this year (from 1.3%) and 2.2% for next year (from 2.8%), citing expansion primarily in China and the Democratic Republic of Congo. However, the bank warned that power shortages in the DRC continue to pose a major operational challenge.
On the demand side, global manufacturing indicators reflect mild expansion. China is still the biggest contributor to worldwide copper consumption, buoyed by strength across electric vehicles, renewable installations, and household appliances.
Near-term softness in Chinese demand is acknowledged, though UBS expects grid-related investment to remain healthy. Meanwhile, the bank noted that consumption in Europe and the U.S. “remains subdued,” constrained by elevated copper prices, weak manufacturing activity, and trade-policy uncertainty. German infrastructure spending is seen as a potential upside catalyst, while U.S. demand is likely to improve gradually.