UBS-Copper Maintain bullish fundamental outlook in 2026-20260105

Remain bullish despite near-term disconnect between prices & physical signals

LME copper prices are close to record highs at the start of 2026, consensus is bullish, netspeculative positioning is elevated and copper equities have re-rated as equity investorsposition for tightness and further price upside…but most physical market signals are notyet reflecting the tightness the market is positioned for. Whilst the current setup leavescopper vulnerable to short-term price consolidation; we remain bullish on thefundamental outlook for copper into 2026 as we believe demand growth will remainresilient at 2.5-3.0% vs mine/refined supply growth of <1% resulting in deficits that willdrive inventory drawdowns and tighter fundamentals will support further price upside.In this report we summarise the key supply & demand drivers that support this view. Wehave conviction that limited growth in mine supply will create shortages of inputs forsmelters/refineries resulting in constrained supply, rather than acceleration in demand.