: Scotiabank just lifted its entire copper price deck and is openly flagging a near-term squeeze toward $7/lb.
The bank’s metals team led by Orest Wowkodaw dropped a 50-plus-page fundamental review Sunday with a title that doesn’t bury the lede: the copper market is tighter than you think. Their read is that copper has “entered into a material multi-year net deficit position,” and that the supply side has no realistic shot at filling it because of the extremely long lead times to build a mine.
The new deck. 2026-2029 forecasts go to $5.95, $6.00, $5.75 and $6.00/lb — an average bump of 10% per year. They added a maiden 2030 call of $6.50. The long-run incentive price rises to $5.00 from $4.50. And the part traders will circle: they think “market conditions are ripe for a potential near-term upside price squeeze towards $7.00/lb.” Spot is sitting around $6.12.
Scotia argues that copper miner stocks “appear attractive” and raised targets on most of the metals names it covers.
FM is our top Cu pick; we also highly recommend CS, ERO, FCX, and LUN. We
are restricted on HBM. Among the developers, we prefer IE, MOON, OM, and PCU
First Quantum (FM) is the copper miner that’s been stuck in a legal dispute with Panama over its huge Cobre Panama mine that was shut down over environmental protests. The current government has been more receptive and trying to find a solution.
In terms of supply-demand balance, they see copper demand rising 2.5%, 2.4% and 2.3% from 2026-28 and note that China copper demand growth in 2025 was surprisingly strong despite a sluggish economy as it rose 4.6% last year. Global demand rose 3.7% last year.
The main supply lever is Chile, which is the world’s largest copper miner but it’s struggling. It produced a high of 5.83 million tonnes in 2018 and was at 5.42m in 2025 but down 7.9% on a y/y basis through April.
The pipeline is starving: planned growth capex of $7.4B/yr in 2026-2028 is down a brutal 49% versus the $14.7B/yr spent in 2023-2025.
The longer-term view on copper continues to look tight:
“Despite our expectation of several new
larger-scale mine developments moving ahead over the next 12-24 months, including Copper World,
Santa Cruz, Santo Domingo, and Vicuna District, we forecast very modest net supply growth (before
disruptions) of only 0.4 million tonnes in 2029, negative 0.3 million tonnes in 2030, and negative 0.4
million tonnes in 2031, respectively, totaling a net decrease of 0.3 million tonnes over that three-year
period. This phenomenon is driven by the impact of lower grades and depletions at the world’s existing
capacity. In our view, the timing for many of these expected future projects could easily slip due to
construction delays and other factors.”
The tariff wildcard this month
The Section 232 probe on refined copper imports is expected to wrap by month-end. Comex is trading at only a ~2% premium to LME now, down from a 31% blowout last July. Roughly half of all visible global stocks have piled into US warehouses ahead of a possible tariff. If the decision comes back clean — no tariff — Scotia expects some of that metal to bleed back out, which tightens everyone else.
Other positive potential drivers that Scotia sees are demand for data centers, which could 3.2-3.9% of global supply and increased defense spending. Defense currently represents an estimated 5-8% of global copper
consumption.
The big one is more consumers using more electricity. If China and other emerging markets converge towards US-level electricity use, there is a massive tailwind for copper demand as grids are built out and expanded.
The risks? Eventually they see a China population decline as a problem but highlight that it’s tough to predict when that will matter. The other thing is global growth and demand and there is how they frame it:
Our analysis suggests that all
else equal (i.e., primary mine production and scrap supply grow as
anticipated), global demand growth rates below ~+1.0% per annum
would be required to push the copper market into a meaningful
surplus position over time, with a commensurate inventory build
that would likely overhang pricesThe copper market is tighter than you think — Scotia
