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Total Metals Corp. is focused on advancing high-grade gold projects to production.
Amid easing geopolitical tensions and news that the Strait of Hormuz may reopen, international copper prices have recently rebounded to above $13,000 per ton, approaching historical highs. However, UBS has warned that high global inventories and diverging demand signals suggest a more balanced outlook for copper prices in the short term, rather than a one-sided bullish trend.
UBS notes that visible global copper inventories have now climbed to near-record levels, reaching 1.25 million tons, with a corresponding inventory-to-consumption ratio of 2.5 weeks — the highest since 2018. The firm believes that sustained supply deficits are needed to absorb this buffer stock before a genuine tightness in physical copper emerges.
Despite this, UBS maintains a structurally bullish view on copper prices in the medium term. The bank states that the fundamental logic based on supply constraints and the resilience of energy transition demand remains unchanged, and has in fact become more compelling amid geopolitical tensions.
On the supply side, UBS forecasts that global mined copper production growth will fall below 1% in 2026. In Chile, year-to-date output has already declined by 4% year-on-year, while Codelco has seen a further 6% drop in production due to ongoing operational challenges at the El Teniente mine following last year’s earthquake. Mine supply is expected to rebound in 2027 and 2028 as disrupted operations such as Cobre Panama, Grasberg, and Collahuasi return to full capacity, adding a combined total of over 1.2 million tons of new output. However, UBS believes that even with demand growth of 2% to 3% per year driven by electrification, grid investment, and electric vehicles, this additional supply will still be insufficient to avoid a market deficit.
Demand signals are mixed. UBS observes an encouraging decline in copper inventories in China since the Lunar New Year, while demand signals from Europe, the United States, and Southeast Asia remain weak.
In terms of individual stock investment strategies, UBS favors selective positioning, with a positive view on First Quantum (FQVLF), Anglo American (AAL), Teck Resources (TECK), and KGHM (KGHPF), while adopting a relatively cautious stance on Southern Copper, Antofagasta, and Lundin Mining. Among these, First Quantum is seen as an attractive value investment, as the company recently received government approval to process stockpiled ore at the Cobre Panama mine — a move interpreted by the market as significant tangible progress toward restarting the idled operation.
On price forecasts, UBS expects copper prices to reach $5.21 per pound in 2026 and rise to $5.75 per pound in 2027.
Conclusion: In summary, although copper prices have rebounded to high levels following the easing of geopolitical tensions, UBS believes that short-term upside is constrained by record-high global inventories and weak external demand, making a one-sided bullish rally unlikely. In the medium term, supply constraints and demand growth driven by the energy transition continue to provide structural support, but a genuine physical shortage will require the gradual absorption of existing inventories.
