Jefferies Sees Bullish Scenario For Copper Unfolding

@Goldfinger · 2026-06-09 · 4 upvotes · 2 replies

In a fresh research report, analysts at Jefferies have materially raised the firm’s base-metals price deck, with the biggest headline being a new peak LME copper forecast of $8.00/lb, or roughly $17,600/t, around 2030–2031. That is up from Jefferies’ prior long-term peak forecast of about $6.00–$6.50/lb. Jefferies also raised aluminum forecasts and highlighted Freeport, Glencore, Anglo, Teck, and Alcoa as preferred mining equities.

Freeport-McMoRan (Weekly)

Alcoa (Daily)

The main factor in Jefferies’ outlook is a shift from supply-driven to demand-driven market conditions. Jefferies’ revised base metals outlook is another signal that copper and the broader industrial metals complex are moving from a tired old China/housing cycle narrative into a much larger strategic infrastructure story.

The firm is pointing to accelerating demand from U.S. data center construction and power infrastructure buildout — two themes that are increasingly central to the copper bull case. After three years of weakness, the U.S. ISM index has now remained above 50 for five consecutive months, suggesting that the manufacturing side of the economy may finally be reawakening at the same time that AI, grid expansion, electrification, and energy security are becoming dominant investment themes.

On the supply side, Jefferies notes that constraints remain firmly in place. The war in Iran has only added another layer of stress to already fragile supply chains, reinforcing the point that base metals markets have very little margin for error. This is not a market where supply can simply be switched on with the flick of a button.

Copper supply is not responding fast enough: A delayed recovery at Grasberg, weaker/higher-cost output at Kamoa-Kakula, and very weak April production from Chile, reportedly the weakest in 23 years.

Jefferies is now forecasting an average copper supply gap of roughly 491,000 tonnes per year by the end of 2030.

Perhaps most importantly, Jefferies argues that base metals demand is relatively price inelastic. For white goods and electric vehicles, metals represent roughly 25% of total manufacturing costs. A 25% increase in metals prices would only translate into a 5%–6% increase in total manufacturing costs. In data centers, the impact is even smaller: a 25% increase in metals prices would add just 2%–3% to overall construction costs.

That is the crux of the $8/lb copper argument. Copper can rise a lot before it truly breaks demand, because it is mission-critical yet still a relatively small piece of the total cost stack for the sectors that need it most.

“Our analysis suggests the recovery in US PMI data should begin to feed through into copper demand in the coming months (the index has been >50 for 5 months after 3 years of weakness). At the same time, the potential for targeted credit easing in China and sustained fiscal expansion in the US support the backdrop for global money supply growth from current levels. Note that US M2 grew at a 7.2% compounded annual growth rate (CAGR) from 1971 until August 2022, but has grown at an average rate of just 0.8% since then, suggesting the Fed has significant room to ease as long as inflation subsides.

Copper should be the best‑performing major commodity within our coverage in a scenario where global M2 growth and US manufacturing activity simultaneously accelerate, but all industrial metals should benefit. A recession due to a sustained oil price spike or Fed rate hikes are clear risks. However, we believe the signs pointing toward a potential multi-year upcycle skew the risk/reward trade-off to the upside and support our call for a rising copper price to a (real) peak of $8.00/lb by 2030-31.” ~ Jefferies Global Research

Copper (Weekly)

Jefferies does flag the obvious risks: geopolitics, inflation, an oil-price shock, or a Federal Reserve forced back into rate hikes could all weaken the economy and pressure the sector. But absent a recessionary shock, the message is clear: base metals are entering a new era where demand is becoming more strategic, supply is becoming more fragile, and copper prices may need to move much higher before the market can find balance.

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