Bullish copper price scenarios have disappointed this year but UBS sees this as a case of a delay to something that will happen and the pure miners still have appeal for the medium term.
Prices have been subdued as smelters have stayed open and demand has not recovered as strongly as expected, but the long-term story remains intact argues the bank.
Secular demand drivers (renewables, grids, EVs) with the potential of new by high-growth sectors such as AI data centres and defence to come.
“We continue to believe 'traditional' end-use sectors (construction, manufacturing, consumer durables) will eventually bounce back, supported by restocking and China demand is improving
“In our view smelter cuts will materialise in the fourth quarter of this year and early into 2025.
“We see a low probability of material growth in mine supply in 2025/26 pushing the market into surplus and believe the physical market will tighten over the next 6-12m and forecast protracted deficits resulting in elevated copper prices for an extended period.”
Antofagasta PLC (LSE:ANTO) tops the London-listed ways to pay this trend, UBS suggests with Teck and Ivanhoe overseas favourites.