Market Overview - The global copper market is shifting from a surplus of 178,000 tons in 2025 to a potential deficit of 150,000 tons due to supply struggles against rising demand [1] - Mine output is expected to increase by 2.3% in 2026, driven by new capacities in Mongolia and Russia, but disruptions in key producing countries like Chile and Indonesia will hinder overall supply [2] Price Dynamics - Copper prices are supported by supply constraints and a weaker U.S. dollar, despite a quieter rally compared to precious metals [3][4] - Morgan Stanley forecasts an average copper price of $4.83 per pound in 2026, aligning with current levels but significantly above the year-to-date average [5] Supply Challenges - The copper industry faces significant challenges, including underinvestment leading to low exploration budgets and permitting delays that extend project timelines [6] - Major sector consolidations, such as the $53 billion merger between Anglo American and Teck Resources, may not effectively resolve supply issues, as newly enlarged miners may prioritize high-return assets over increasing total output [7] Company Insights - Southern Copper Corp. has been upgraded to Equal Weight by Morgan Stanley, with a mid-2026 price target of $132 per share, highlighting its copper exposure and dividend potential [5] - Freeport-McMoRan shares experienced a significant drop of over 15% due to operational disruptions, which could lead to reduced supply forecasts for 2026 [5] Stock Performance - Southern Copper Corp. stock was trading higher by 2.17% to $135.40, while Freeport-McMoRan was up 3.13% [8]