Copper: Raising Our Price Forecast on US-China Competition

US-China competition for metal tightens the ex-US market. China's shortage of scrap is increasing its need for refined copper, so far met by domestic inventory draws, just as the US continues to import and build inventory ahead of potential tariffs. With mine supply weaker than we previously expected, we now expect larger ex-US deficits of around 950kt in 2026 and 220kt in 2027 (vs. 640kt and 170kt previously). With US-China competition likely continuing to play out over the next year, combined with a higher positioning assumption, which partly reflects increased investor interest in hard assets, we raise our end-2026 copper forecast to $14,700/t from $13,735/t (vs. forwards at $14,437) and our 2027 average forecast to $15,400/t from $13,800/t (vs. forwards at $14,405). Risks are skewed to the downside: a more hawkish Fed path and higher yields, a broader sell-off in AI-linked equities that could trigger a reduction in investor length, and changes in US tariff policy. We recommend goin