UBS said it has made positive revisions to base metals forecasts, with a preference for copper and aluminium, while trimming nickel estimates and maintaining a cautious stance on zinc.
Analysts led by Daniel Major argue that the period of “maximum uncertainty/instability created by tariffs [is] behind us,” with macro supports such as U.S. rate cuts, dollar weakness, confidence in the AI trade, and potential China stimulus underpinning demand.
For copper, UBS lifted its 2025 and 2026 price forecasts by about 3%, now expecting $4.37/lb in 2025 and $4.80/lb in 2026. Analysts see fundamentals strengthening into 2026 - 2027, driven by limited mine supply growth, pressure on refined output and secular drivers such as electrification and technology demand.
Aluminium forecasts were also revised higher, up roughly 5% for 2025 - 2026, with UBS pointing to constrained supply as a key support.
By contrast, nickel forecasts were cut by around 5% for 2026 - 2027, reflecting oversupply risks. UBS now expects $7.25/lb in 2026 and $7.50/lb in 2027, down from previous estimates of $7.50/lb and $8.00/lb, respectively.
Zinc forecasts were nudged up about 5% for 2025 - 2026, though the bank cautioned that rising supply could ease tightness over the medium term.
Alex Shishlo, Editor in Chief of the European Bureau, Rough&Polished
