UBS analysts expect copper prices to rise next year due to reduced supply amid ongoing mine disruptions.
In addition, the rise will be supported by high long-term demand associated with the transition to clean energy and increased investment in this area, the bank said in a statement.
UBS raised its copper price forecast for the end of the first quarter of 2026 by $750 to $11,500 per ton. Expectations for June and September were raised by $1,000 to $12,000 and $12,500 per ton, respectively. Experts also set a target level for December next year at $13,000 per ton.
Analysts now believe that the copper deficit in the global market this year will be about 230,000 tons, compared to the previously expected 53,000 tons, and in 2026 – 407,000 tons, compared to 87,000 tons. In their opinion, declining inventories and ongoing supply risks will keep the market tight.
Disruptions at mines this year, including production problems at Freeport-McMoRan’s Grasberg mine in Indonesia, slower recovery of production in Chile, and recurring protests in Peru, highlight structural supply constraints that are likely to persist until 2026, the bank said in a statement.
Freeport-McMoRan said it plans to resume production at the Grasberg copper and gold mine by July after operations were suspended two months ago due to a fatal accident.
UBS lowered its forecast for refined copper production growth to 1.2% in 2025 and 2.2% next year, citing deteriorating ore quality and operational problems. Analysts expect global demand for the metal to increase by 2.8% both this year and next due to the development of renewable energy sources, electric vehicles, investments in power grids, and data centers.
The bank’s experts believe that any price decline will be short-lived and recommend maintaining long positions in copper.
Earlier, the Experts Club information and analytical center released a video dedicated to global copper production and leading producing countries – https://youtube.com/shorts/_h8iU50z8C0?si=a-XkgGEfeUxseQNa
The global equity market is approaching the formation of a bubble, according to UBS global equity strategist Andrew Garthwaite.
Garthwaite, whose opinion is cited by MarketWatch, compares the current conditions to the dot-com boom of the late 1990s and the Japanese market bubble of the 1980s. According to him, the stock market already meets six of the seven criteria for a bubble.
First, the structural bull market, which UBS defines as a period when the dynamics of stocks over ten years outpaces the dynamics of bonds by at least 5% per year, has ended.
Secondly, corporate profits are under pressure, and their growth is slowing, especially in cyclical sectors.
Thirdly, the breadth of the market has been lost. Its dynamics are determined by the stock prices of a small number of tech giants, while smaller companies lag behind.
Fourth, 25 years have passed since the last bubble.
Fifth, investors believe that “this time it’s different,” expecting a significant increase in productivity due to generative artificial intelligence (AI).
Sixth, retail investors are actively involved in the auction, buying speculative assets ranging from “meme” stocks to cryptocurrencies.
At the same time, the seventh criterion – loose monetary policy (LMP) – has not yet been met.
We should be worried if the yield on ten-year US Treasury bonds exceeds 5%, according to Mr. Hartwright. Currently, it is about 4.65%, but UBS predicts that it will decline to 4.25% by the end of the year.
The expert also prefers “defensive” stocks of issuers with low debt burdens, such as SAP, Microsoft Corp. and BAE Systems, to securities of non-financial companies in cyclical industries.
In the UK, he sees opportunities for investors in interest rate-sensitive sectors, such as real estate and utilities, which are trading at a significant discount.
