UBS has softened its bullish stance on copper as global markets reel from the economic fallout of President Donald Trump’s sweeping new tariffs.
The metal has tumbled by more than 15% from its March highs, with prices dipping below $9,000 per tonne on the London Metal Exchange, a sharp reversal for a commodity long seen as a bellwether for industrial growth.
The Swiss bank now expects slower demand growth this year, cutting its forecast to 1.7% from 3.4%. It points to weaker global economic activity, particularly in the US and Europe, and a likely slowdown in China to around 4% growth.
Copper imports into the US are also expected to drop after a surge earlier this year ahead of the tariffs taking effect.
But while the short-term outlook has dimmed, UBS maintains that copper’s long-term fundamentals remain sound.
Structural drivers such as the global energy transition, which relies heavily on copper for electric vehicles, wind turbines and power infrastructure, continue to support the case for higher prices.
On the supply side, the market remains tight. Disruptions have hit output in Panama and Indonesia, although some relief is expected as mining operations resume in both countries. UBS sees the market staying roughly balanced this year, with only a small deficit.
Into the second half of 2025, the bank believes policy easing in the US and further economic support from Beijing could help stabilise demand and revive prices.
While a return to early-year highs may take time, UBS expects copper to reach $9,750 per tonne by December and $10,250 by March 2026.
For now, the bank prefers strategies that profit from recent volatility, such as selling downside risk in options markets - a sign that while optimism has cooled, UBS still sees copper as more bruised than broken.