Deutsche Bank's analysis highlights a tightening supply squeeze in the global copper market. Against the backdrop of accelerating industry consolidation, severe supply disruptions have driven copper prices close to historic highs.
According to market reports, Deutsche Bank stated on November 30 that due to significant supply disruptions and rapid industry consolidation, mine supply is expected to decline in 2025, with only a modest 1% rebound the following year, leaving the market in a "clear deficit state."
Impact on Investors: This outlook prompted Deutsche Bank to raise its 2026 copper price forecast to $10,600 per ton, with prices potentially exceeding $11,000 per ton in the first half of 2026. The copper market has entered a new phase dominated by incentive pricing. Investors should closely monitor upcoming "Capital Markets Days" (CMD) from major mining giants, particularly Glencore, whose M&A activity and projected free cash flow yield of 10% (2026E) make it a focal point.
Key Company Developments: Glencore will host its first CMD in two years, aiming to restore confidence in its operational capabilities. Meanwhile, Rio Tinto will emphasize business simplification and capital discipline. Deutsche Bank lists Anglo Teck, Glencore (GLEN), and Freeport-McMoRan (FCX) as top picks.
On December 1, LME copper prices hit a record high of $11,279 per ton.
Copper Market Outlook: Supply Shortage Inevitable While the report acknowledges risks, such as concerns over an "AI bubble," Deutsche Bank believes incentive pricing will persist unless a severe global economic slowdown occurs. Long-term drivers include:
Electrification & Digitalization Trends: Global electricity demand growth surpassed GDP expansion in 2024 and is expected to continue at a healthy pace.
Slow Project Approvals: New copper mine approvals may remain insufficient to meet future demand.
Deutsche Bank upgraded Boliden (BOL) to "Buy" while downgrading First Quantum (FM) to "Hold."
Glencore’s CMD: A Comeback or Hidden Agenda? Glencore will hold its first CMD since 2022 on December 3, drawing significant market attention. After years of weak output, the company aims to rebuild investor confidence in its operational capabilities and showcase growth opportunities in its copper business.
Deutsche Bank suggests that if Glencore limits its 2026 production guidance cut to copper (already anticipated) while maintaining 2027/28 recovery targets and keeping industrial capex (excluding unapproved major projects) within $6–7 billion, the update could be well-received. However, M&A remains the "elephant in the room," with Glencore historically open to divesting segments like coal for the "right deal." Reports also indicate potential sales of its Kazzinc unit. With a 2026E spot FCF yield of 10%—the highest among peers—Glencore’s valuation is highly attractive.
Rio Tinto & Others: Focus on Capital Discipline & Divestments Rio Tinto’s CMD on December 4 is expected to emphasize streamlining operations, capital discipline, and non-core asset sales. Deutsche Bank anticipates Rio will reaffirm annual group capex guidance of $10–11 billion (potentially lowering it below $10 billion mid-term), introduce cost targets, and update plans to sell smaller units (including borates and iron-titanium businesses). Additionally, Rio will debut 2026 production guidance, with Simandou project updates under scrutiny amid concerns over potential 2025 oversupply. No major strategic shifts are expected.
Other industry events include Vale’s (VALE) CMD on December 2 and Boliden’s project/capex update on December 5. Anglo Teck’s merger vote is scheduled for December 9.
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