London-listed copper producers are back in the spotlight. UBS has named Antofagasta PLC (LSE:ANTO) and Anglo American PLC (LSE:AAL) among its preferred global picks, highlighting their leverage to constrained supply and long-term demand linked to the energy transition.
Despite a strong rebound in the copper price, miners have largely underperformed the metal over the past year, leaving valuations more reasonable than headlines might suggest.
Copper futures are up more than 15% in the US this year and 10% on the London Metal Exchange.
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However, UBS cautions that the short-term picture may soften.
Speculative flows, tariff-related trade distortions and physical tightness have driven much of the recent strength. With those factors now easing, the bank believes investors should focus on companies with disciplined capital allocation and strong asset quality.
Short-term tightness begins to unwind
While recent fears of a broader trade war between the US and China have calmed, UBS expects a partial reversal in the copper market's recent tailwinds.
Stockpiling ahead of potential tariffs has skewed demand, while arbitrage trades have diverted metal toward the US. With physical premiums now moderating and inventories beginning to normalise, near-term softness cannot be ruled out.
Mine supply also remains under pressure. Production from major listed miners, including Antofagasta and Anglo American, rose just 1.2% year on year in the first quarter and declined nearly 10% from the prior quarter.
That is consistent with seasonal norms, but guidance looks increasingly fragile. Teck Resources has already cut its forecast, and disruptions at the Kamoa-Kakula complex could reduce output further.
UBS forecasts global mine production growth of less than 1% in 2025 and sees limited evidence to suggest companies will exceed expectations.
Structural case still intact
Beyond the near term, the investment case remains strong. Copper demand is supported by structural trends in electrification, renewables, and electric vehicles. China’s smelters continue to ramp up refined output, even as feedstock constraints begin to bite. Low refining charges and tightening scrap supply suggest that refining margins will remain under pressure.
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This is beginning to show. Glencore has closed its Pasar smelter in the Philippines and Altonorte in Chile is temporarily offline. UBS expects refined output growth to slow, particularly outside China, as access to concentrate and scrap becomes more difficult to maintain.
Selective exposure preferred
UBS continues to prefer Antofagasta among the London-listed group, pointing to its disciplined strategy and clear copper focus. It also retains a positive view on Anglo American, citing copper exposure and the potential for a valuation recovery through restructuring.
Freeport-McMoRan, Zijin Mining and Sandfire Resources round out the bank’s preferred names.
While copper miners have lagged the metal’s rally over the past year, valuations now look more balanced.
For those with a medium-term view, exposure to high-quality copper producers offers a measured way to participate in the transition story, without needing to chase short-term momentum.