UBS Forecasts 520,000 Metric Ton Bakır Shortage: Impact of US Tariffs and Supply-Demand Dynamics

UBS maintains a bullish outlook on the copper market while forecasting a 520,000 metric ton supply gap for 2026. LME copper prices remain above $9,000 per metric ton, but uncertainty surrounding the US' Section 232 copper tariffs is driving material to the US COMEX market. UBS supports long-term copper positions, citing stable supply-demand fundamentals despite short-term hurdles. The decision on the Cobre Panama mine is expected this year. Additionally, UBS proposes an alternative strategy of hedging price decline risks to enhance returns.

Impact of US Tariffs and Market Dynamics

■Uncertainty over US copper tariffs is driving material to the US COMEX market.

■This is affecting inventory dynamics outside the US.

■UBS anticipates increased demand in the US COMEX market due to this shift.

UBS' Copper Strategy

■UBS forecasts a 520,000 metric ton supply gap for 2026.

■This supports long-term copper positions.

■The strategy is particularly effective during price declines.

■UBS also suggests hedging price decline risks to boost returns.

The uncertainty surrounding US copper tariffs is reshaping the dynamics of the global copper market. UBS' forecasts indicate that long-term investors should exercise caution. This scenario, coupled with rising demand in electric vehicles and renewable energy sectors, suggests that copper prices could remain stable over the long term.