UBS lifts copper price forecasts on supply constraints despite mixed near-term signals

UBS has raised its copper price forecasts, citing a positive fundamental outlook driven by supply constraints and resilient demand from the energy transition, despite mixed near-term demand signals.

The investment bank increased its 2026 copper forecasts by 13%, and lifted 2027 and 2028 projections by 4% and 3% respectively to $6.0 per pound or $13,200 per tonne. Long-term forecasts were raised by 10% to $5.50 per pound.

Copper prices on the London Metal Exchange have rebounded close to record highs above $13,000 per tonne following a brief pullback after the outbreak of the Middle East conflict. Both physical and paper markets have re-engaged with copper and copper equities.

UBS noted that mine disruptions and downgrades continue at operations including Kamoa-Kakula and Grasberg. The firm believes energy price volatility is likely to reinforce the need for sustained investment in renewables, grids and reshoring that will support copper demand over the medium term.

The bank’s supply and demand model indicates the market is likely to move into deficit, with tighter physical markets and inventory drawdown expected to support elevated prices. However, UBS cautioned that the market is not extremely tight currently, with demand signals remaining mixed.

While mine output remains under pressure, smelter output continues to hold up, suggesting the anticipated copper deficit may take longer to materialize and an inventory buffer will need to be eroded for real physical tightness to emerge, according to the report.

UBS said sustained high prices will increase pressure for thrifting and substitution, creating a balanced near-term outlook after recent price gains.