UBS strategists predict continued copper gains after a period of consolidation. The analysts point to ongoing concerns about potential U.S. tariffs and supply disruptions as key drivers. These factors are expected to support higher prices, even as demand from China softens. Investors should watch for the impact of any new stimulus measures in China.

Softer conditions in China, where copper imports fell, have contributed to the recent price stabilization. However, UBS believes that a recovery in Chinese demand, spurred by anticipated stimulus, will support prices. Meanwhile, inventories at the Shanghai Futures Exchange have risen, a typical seasonal pattern. Supply constraints remain a long-term bullish factor.

Declining ore grades in Chile and production challenges in Peru are also expected to limit supply growth. UBS forecasts a market deficit of approximately 407,000 metric tons in 2026. This potential deficit suggests that inventories will likely fall, pushing copper prices higher, perhaps to $14,000 per metric ton or above.

Speculative positioning has begun to unwind, which could keep prices consolidating in the near term. However, any pullbacks could be opportunities to add exposure, according to UBS. The firm remains bullish on copper, despite the current consolidation phase, anticipating a continuation of the upward price trend. Investors should monitor copper prices closely.