Copper is getting more expensive, and if you believe the latest forecasts from UBS, that trend isn't reversing anytime soon. The bank just raised its 2026 price targets across the board, warning that a combination of supply troubles and growing demand is creating the kind of market tension that pushes prices higher.

In a note released Friday, UBS bumped its March 2026 copper forecast by $750 per metric ton to $11,500. The June and September targets got even bigger increases—$1,000 each—bringing them to $12,000 and $12,500 respectively. The bank also introduced a new December 2026 target of $13,000 per ton.

Behind those numbers sits a more troubling reality. UBS now expects a 230,000-ton supply shortfall this year and a 407,000-ton deficit in 2026. Both projections are several times larger than earlier estimates, driven by refined output growth that's crawling along at just 1.2% in 2025 and 2.2% in 2026. When production barely grows and demand keeps climbing, the math gets uncomfortable fast.

When Mines Don't Cooperate

The supply side keeps hitting snags. Chile has seen lower-than-expected recoveries this year. Peru continues dealing with recurring unrest. And then there's Freeport-McMoRan (FCX), which is still working through operational issues at its massive Grasberg complex in Indonesia.

The Grasberg Block Cave facility—a critical piece of global copper supply—suffered a devastating mudflow in September that killed seven workers and shut down operations entirely. The restart is now pushed to the first quarter of 2026, and when it does come back online, expected production is 478,000 tons of copper cathode. That's well short of the original 700,000-ton goal.

These aren't minor hiccups. They're structural constraints that are tightening the market at precisely the wrong time. Because while supply stumbles, demand is accelerating in the opposite direction.

The Demand Story Stays Strong

UBS projects global copper consumption will grow 2.8% in both 2025 and 2026. The drivers are familiar but powerful: electric vehicles, renewable energy buildouts, grid infrastructure upgrades, and the rapidly expanding data center construction that's eating up massive amounts of copper wiring.

This supply-demand divergence is making copper assets extraordinarily valuable and increasingly difficult to acquire. Consider BHP's (BHP) dramatic last-minute attempt to block Anglo American's (AAUKF) planned $53 billion combination with Teck Resources (TECK). That's not typical corporate maneuvering—that's what happens when companies realize copper is becoming scarce and they need to secure access now.

Washington Gets Involved

The tightening copper market has caught the attention of U.S. policymakers, who increasingly view copper and other critical minerals as matters of national security. Securing reliable supplies has become a priority, particularly as the country looks to reduce dependence on China and Russia.

The U.S. Export-Import Bank is leading the charge with plans to invest $100 billion as part of this broader strategic effort. "We can't do anything else that we're trying to do without these underlying critical raw material supply chains being secure, stable and functioning," newly appointed EXIM chair John Jovanovic told the Financial Times.

The bank has already committed $1.25 billion to Barrick's (B) Reko Diq project in Pakistan. And according to Jovanovic, several additional critical-minerals transactions are in the works—deals he described as "orders of magnitude larger," though he declined to provide specifics.

The bottom line: copper isn't just another commodity anymore. It's infrastructure, it's energy transition, it's data centers, and increasingly, it's geopolitics. When supply can't keep up and governments start throwing around $100 billion investment plans, you know the market is taking this seriously.