Copper prices approach historic highs! UBS continues to be bullish: "Still the most bullish"

Copper prices were quoted at around $14,622/ton on Friday. UBS reiterated copper as its "highest-conviction" commodity theme, arguing that electrification and data center demand will continue to outpace supply growth in the coming years, with the supply deficit expected to persist into the early 2030s. Meanwhile, a strike at Chile's Centinela copper mine could impact output within two weeks, and Deutsche Bank warned that global copper inventories have fallen to extremely low levels, while raising its LME copper target price for Q2 next year to $22,050/ton. London copper futures closed near a record high on Friday, with multiple Wall Street institutions issuing warnings in succession: global copper supply continues to shrink, and prices may rise further. Tha Ziegler, a member of UBS's US Equity Advisory Sales team, wrote in a Friday report: "Copper remains one of our highest-conviction commodity themes." She noted that demand growth from electrification and data center construction is expected to continue outpacing supply growth, and the structural support for copper prices remains intact. Electrification, data center construction, and persistent supply constraints will continue to underpin the long-term constructive outlook for copper. For investors, the key takeaway is: supply growth is expected to lag demand growth in the coming years, which will support copper prices at elevated levelseven though tariffs and trade policy still pose short-term uncertainties. On Friday, copper prices closed at around $14,622/ton. Tha Ziegler believes the copper supply deficit will persist into the early 2030s. At the same time, two major variablesthe Chilean mine strike and critically low global inventoriesare compounding, further compressing the market's buffer. Chilean Strike Sounds Supply Alarm Natalia Corfield, head of Latin America corporate credit research at JPMorgan, noted this week that a strike has broken out at Chile's Centinela copper mine. Centinela is one of Antofagasta's major copper mines in Chile. According to Bloomberg, the two unions behind the labor action warned that if the strike continues, Centinela could begin cutting copper production in as little as about two weeks. This event adds another variable to an already tight copper supply situation. Inventories Fall to Extremely Low Levels, Deutsche Bank Raises Target Price Daniel Ghali, head of metals research at Deutsche Bank, warned last month that global copper inventories have fallen to "unprecedented lows," partly because stockpiling by the US and China is squeezing supply in other regions. Ghali raised his LME copper target price for Q2 2027 to $22,050/ton. Against this backdrop, Ziegler said the UBS team remains bullish on mining stocks highly correlated with copper prices. She wrote: "Top picks include Freeport-McMoRan, First Quantum, Hudbay, and Teck Resources. All four companies are seen as well positioned to benefit from the anticipated multi-year copper upcycle driven by structural demand and constrained supply response." This article is republished from Wall Street CN. GMTEight editor: Chen Yufeng.