Market overview –
Copper traded through the week-ending 12 June in the low‑to‑mid‑13,000 USD/t range on the LME, below the brief spike above 14,000 USD/t seen in May but still more than 40% higher than a year ago. Trading Economics reports COMEX copper futures at about 6.37 USD/lb on 11 June, equivalent to roughly 14,050 USD/t or 14.05 USD/kg, maintaining a sizeable US premium over the LME benchmark.¹
Price drivers and near‑term outlook
UBS’s Chief Investment Office notes that LME copper briefly exceeded 14,000 USD/t in May, driven by a combination of sulfur shortages, tight scrap and concentrate supply in China, and ongoing mine disruptions. Those same constraints remain in place but are now interacting with softer macro signals and elevated inventories, producing more range‑bound trade in early June.
Looking ahead, UBS forecasts LME copper at 14,000 USD/t in September 2026, 14,500 USD/t in December 2026, 15,000 USD/t in March 2027 and 15,500 USD/t by end‑June 2027, implying a steady step‑up in prices as the market deficit deepens. UBS Global Research has separately lifted its medium‑term deck to 6.0 USD/lb (13,200 USD/t, 13.2 USD/kg) for 2027–29 and its long‑term incentive price to 5.50 USD/lb (about 12,100 USD/t, 12.1 USD/kg), arguing that this is the level required to bring through 6–7 Mt of new mine supply by 2035.
Supply, demand and inventories
UBS continues to project a refined copper market deficit of about 520,000 t in 2026, widening from an estimated 203,000 t deficit in 2025. On the demand side, global copper consumption is expected to grow by around 2.8% in 2026, led by grid investment, EVs, renewables and continued build‑out of data centres. UBS’s global work highlights that end‑use growth of 2–3% per year on a 35 Mt demand base requires 700–1,050 kt of new copper annually—well ahead of the 1% mine supply growth expected for 2026.
Refined supply is still being supported by strong Chinese smelter output and growing scrap utilisation, even as the concentrate market tightens sharply. UBS estimates global refined production growth of about 1.7% in 2026, implying that inventories will only start to trend lower as deficits accumulate in 2027–28.
Inventory trends remain divergent across regions. SHFE‑tracked copper stocks in Shanghai have fallen by roughly 178,500 t since end‑March as Chinese buyers restocked on earlier price weakness and seasonal demand from the power sector kicked in. By contrast, COMEX inventories have risen by roughly 38,000 t since late Q1 and now sit around record levels near 570,000 t, reflecting pre‑emptive US restocking ahead of possible 2027–28 tariffs on refined copper. LME on‑warrant stocks have climbed by about 35,000 t this year to near 400,000 t but have flattened out in recent weeks, leaving global visible inventories close to 1.2–1.25 Mt, or about 2.5 weeks of consumption.
Geopolitics, war and policy
The Middle East conflict and the risk of renewed disruption in and around the Strait of Hormuz remain key macro overlays for copper, but so far they have not derailed the structural bull case. UBS notes that energy‑price volatility and heightened defence and infrastructure spending are, if anything, reinforcing the need for grid and renewable investment—both copper‑intensive sectors—even as they dampen parts of traditional manufacturing demand.
US trade policy is more immediately material for physical market flows. UBS CIO highlights that COMEX‑LME spreads have widened back out to around 200 USD/t, but remain insufficient on their own to redirect large volumes to the US given logistics and quality constraints. The US Department of Commerce is due to update its Section 232 recommendations by 30 June, following earlier proposals for phased tariffs on imported refined copper of 15% in 2027, rising to 30% in 2028; Bloomberg notes that the premium for US prices over the rest of the world has already expanded in anticipation.
Further out, UBS expects a more supportive permitting and fiscal environment for large copper projects in countries such as Chile, Argentina, the US and parts of Africa, but stresses that approvals remain well below what is needed to close the projected 6–7 Mt supply gap by 2035. This underpins their view—and that of other analysts cited in the Financial Times, Economist and CRU coverage—that copper will remain strategically tight even if cyclical headwinds emerge.
Implications for mining companies
For existing producers, the current price environment remains highly cash‑generative. UBS’s Australia copper report calculates that its upgraded price deck for 2027–28 (6.0 USD/lb) lifts 2026–28 earnings by roughly 2–13% across ASX copper names and by up to 20% in some cases. On UBS estimates, copper now accounts for more than 50% of BHP’s FY27 EBITDA and around 30% for Rio Tinto, while pure‑play and copper‑leaning mid‑tiers such as Capstone and Sandfire trade at a premium EV/EBITDA multiple relative to diversified miners and gold producers.
The same report underscores the capital intensity challenge. UBS, using Wood Mackenzie data, puts average capex intensity for upcoming projects at roughly 26,500 USD per annual tonne of capacity, up sharply on earlier cycles, with multiple greenfield projects implying even higher costs. Their global analysis suggests that around 175 billion USD in real capex will be required by 2035 to deliver sufficient new copper supply, even after factoring in rising scrap recovery and incremental throughput at brownfield operations.
For Australian operations specifically, UBS reiterates that copper remains at the centre of this mining cycle, with domestic names positioned to benefit both from higher realized prices and from growing investor preference for “copper‑heavy” portfolios. However, they also flag execution risk around large expansions and the importance of discipline in bringing high‑capex projects such as Olympic Dam’s staged growth and South Australian hub developments to market.
Supply, demand and price metrics (USD/t and USD/kg)
Using current and forecast benchmarks, the key reference points are:
- Spot LME (early–mid June): about 13,500–13,700 USD/t, equivalent to 13.5–13.7 USD/kg.
- COMEX (11 June close via Trading Economics/MarketWatch): around 6.37 USD/lb, or roughly 14,050 USD/t (14.05 USD/kg).
- UBS CIO forecasts (LME):
- Sep 2026: 14,000 USD/t (14.0 USD/kg)
- Dec 2026: 14,500 USD/t (14.5 USD/kg)
- Mar 2027: 15,000 USD/t (15.0 USD/kg)
- Jun 2027: 15,500 USD/t (15.5 USD/kg).
- UBS long‑term incentive price: 5.50 USD/lb ≈ 12,125 USD/t (12.1 USD/kg).
These price levels remain well above Wood Mackenzie’s estimate of the 90th–95th percentile fully‑loaded cost curve (around 3.5–4.0 USD/lb), meaning most incumbent mines are generating strong margins while new projects still require careful capital allocation.
ConnectOre and ICAA initiatives
For industry participants trying to navigate this “higher‑for‑longer” copper environment, ConnectOre and the ICAA’s broader work program continue to provide practical, collaborative tools.
ConnectOre is ICAA’s digital platform that aggregates technology insights, project case studies and emerging research from across the copper value chain, with a particular focus on zero‑emissions mining and processing solutions. By combining member‑contributed knowledge with its Copper AI engine, the platform is designed to shorten the cycle between innovation, deployment and measurable emissions reductions at mine and plant level.
Go to https://connectore.org
