Summary of Conference Call on Copper Market Outlook for 2026 Industry Overview - The focus is on the copper market, with a specific outlook for 2026, highlighting macroeconomic factors and supply-demand dynamics that could influence copper prices significantly [1][2][3]. Key Points and Arguments 1. **Price Expectations**: There is a strong expectation for copper prices to rise, with historical highs recently reached in both Shanghai and London copper markets, indicating robust market sentiment for 2026 [1][3]. 2. **Supply-Demand Dynamics**: A persistent supply-demand imbalance is noted, with the need for higher prices to stimulate supply. If copper prices do not increase significantly in the coming years, the supply-demand gap is expected to widen [2][9]. 3. **Inventory Levels**: Current inventory levels are low, particularly in non-US regions, which is a critical factor that could catalyze price increases. The low inventory situation is seen as a significant driver for future price movements [6][9]. 4. **Global Production Trends**: The production from the top 15 global copper mining companies is declining, with an expected reduction of 300,000 tons in total output for the year 2025. This trend is anticipated to continue into 2026, exacerbating supply constraints [10][11]. 5. **Impact of AI Development**: The rise of AI technologies is projected to significantly increase copper demand, with major projects like the Stargate initiative expected to require substantial amounts of copper, potentially doubling current demand levels [3][16]. 6. **Macroeconomic Factors**: The macroeconomic environment, particularly fiscal and monetary policies in the US and China, is expected to support copper prices. A potential recovery in manufacturing sectors could lead to significant price increases similar to those seen in early 2024 [4][8]. 7. **Future Supply Challenges**: New mining projects are unlikely to meet the anticipated demand growth of 800,000 to 1,000,000 tons, leading to a likely widening of the supply gap [11][12]. 8. **Long-term Capital Expenditure Trends**: Insufficient capital expenditure in the mining sector is expected to lead to ongoing supply tightness in the coming years, with current spending levels only half of previous cycle peaks [12][13]. Additional Important Insights - **Quarterly Demand Outlook**: The demand outlook for the fourth quarter of 2025 appears weak, but a potential recovery in early 2026 could lead to a strong price rally [7][8]. - **Historical Price Influences**: Past price movements have been influenced by various factors, including geopolitical events and production disruptions, which continue to play a role in shaping market expectations [5]. - **Electric Grid Investments**: Post-2023, investments in electric grids are expected to rise significantly, driven by the need to support renewable energy sources, which could further bolster copper demand [14]. This comprehensive analysis indicates a bullish outlook for copper prices in 2026, driven by a combination of low inventory levels, supply constraints, and increasing demand from emerging technologies and macroeconomic recovery.

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The market expects the Fed to cut interest rates in December, with an 89% probability priced in, and risk assets are strengthening. The A-share market is expected to be weak in the short - term, and the bond market lacks a clear direction. Precious metals show mixed trends, and copper, aluminum, and other industrial metals have different performance and outlooks based on supply - demand and macro - factors. Agricultural products such as soybean meal and palm oil are also affected by various factors and are expected to have different trends [2][3][4]. 3. Summary by Related Catalogs 3.1 Macro - Overseas: Trump will announce a new Fed chair early next year, with Hassett seen as the likely candidate, leading to expectations of a more dovish policy. The 12 - month interest - rate cut probability is 89%. The US 10Y Treasury yield is 4.08%, and the US dollar index is at 99.2. There is no substantial progress in Russia - US talks on Ukraine. Attention is on US November service PMI, November ADP employment, and September industrial output data [2]. - Domestic: The A - share market adjusted with reduced volume, and is expected to be weak in the short - term. The bond market is weak, and the central bank's November net bond purchase of 500 billion yuan was lower than expected [3]. 3.2 Precious Metals - Gold futures fell 0.84% to $4238.70 per ounce, and silver futures rose 1.2% to $59.15 per ounce. Trump's hint about the Fed chair and stable Japanese bond auctions affected the market. The US economic slowdown and dovish signals from the Fed boost the expectation of a 25 - basis - point rate cut. Central banks bought 53 tons of gold in October, a 36% increase. Silver's supply chain shows tight signs. Pay attention to the US ADP data and the PCE index [4][5]. 3.3 Copper - The copper price fell. The OECD predicts that developed economies will end the rate - cut cycle by the end of 2026, and the Fed will cut rates twice next year. Supply shortages limit the downside. New projects are being developed, such as a large - scale copper smelter in Africa and a potential joint - venture project in Canada. The copper price is expected to remain high and volatile, with support at $11000 for LME copper [6][7]. 3.4 Aluminum - The aluminum price was high and volatile. The OECD's economic outlook and inflation data in the eurozone affect the market. The Fed's rate - cut expectation is 87%. Aluminum production capacity is stable, and consumption is resilient. The aluminum price is expected to be range - bound [8][9][10]. 3.5 Alumina - The alumina price was weak. Supply is abundant, and imports are flowing in, with high inventory. A factory's maintenance may provide some support, but more production cuts are needed to stop the decline [11]. 3.6 Cast Aluminum - The cast - aluminum price is expected to be strong. Terminal demand is good due to year - end work and policy support, and the cost is well - supported [12]. 3.7 Zinc - The zinc price is expected to be strong within a range. Supply is expected to decrease by 2.43 tons in December due to raw - material shortages and refinery cuts. However, the consumption off - season and high prices limit the upside [13]. 3.8 Lead - The lead price rebounded. Supply is marginally reduced, and the new e - bike standard may boost consumption. But the open import window and high overseas inventory limit the upside [14][15]. 3.9 Tin - The tin price is likely to rise. The market sentiment is improved, and supply concerns are increasing. It is expected to be strong, waiting for macro and micro factors to align [16]. 3.10 Industrial Silicon - The industrial - silicon price is expected to be weakly volatile. Supply is shrinking, and demand is mixed. The social inventory has increased to 550,000 tons [17][18]. 3.11 Steel (Screw and Coil) - The steel price is expected to be volatile. Spot trading is stable, and the supply - demand drive is limited. Some areas have shortages, and the overall inventory is reasonable [19][20]. 3.12 Iron Ore - The iron - ore price is under pressure. The first shipment from Simandou has been made, and supply is increasing while demand is weakening due to steel - mill losses and reduced blast - furnace operations [21][22]. 3.13 Coking Coal and Coke - The prices of coking coal and coke are expected to be weak. The first round of coke price cuts has been implemented, and supply is strong while demand is weak in the steel - making industry [23]. 3.14 Soybean and Rapeseed Meal - The soybean and rapeseed meal prices are expected to be volatile. The US is seeking to expand soybean demand. South American weather and US soybean exports are key factors. Canadian and Australian rapeseed production forecasts have changed [24][25]. 3.15 Palm Oil - The palm - oil price is expected to be range - bound. The impact of weather on supply is decreasing, and the market is waiting for the MPOB report. Malaysian exports decreased in November, while Indian imports increased [26][27].

Group 1: Availability Paradox and Market Dynamics - Deutsche Bank warns that Pop Mart is facing an "Availability Paradox" as its production capacity aggressively expands to 50 million units per month by year-end, leading to Labubu transitioning from a scarce trendy IP to a mass consumer product, which may signal a decline in popularity for trend-driven toys [1] - If Labubu's popularity peaks in 2026 without new hit products, valuation pressure on Pop Mart will increase significantly [1] Group 2: Copper Market Supply and Price Forecast - Deutsche Bank indicates that the global copper market is experiencing a supply squeeze, with severe supply disruptions pushing copper prices close to historical highs [3] - The report predicts a decline in mine supply by 2025, with only a 1% rebound expected the following year, resulting in a "clear deficit" in the market [3] - As a result, Deutsche Bank raises its copper price forecast for 2026 to $10,600 per ton, with potential peaks exceeding $11,000 per ton in the first half of 2026 [3][6] Group 3: Key Company Updates and Investment Focus - Glencore is set to hold its first Capital Markets Day (CMD) in two years, aiming to restore market confidence in its operational capabilities, while Rio Tinto focuses on business simplification and capital discipline [4][9] - Deutsche Bank lists Anglo Teck, Glencore, and Freeport as preferred stocks, adjusting ratings for Boliden to "Buy" and First Quantum to "Hold" [7] - Glencore's CMD on December 3 is highly anticipated, with expectations that it will provide guidance on copper production and capital expenditures, while also addressing potential M&A discussions [8] Group 4: Rio Tinto's Strategic Focus - Rio Tinto's CMD on December 4 is expected to emphasize capital discipline, business simplification, and divestment of non-core assets, with a projected annual capital expenditure guidance of $10-11 billion [10] - The market will closely monitor production guidance for the Simandou project, amid concerns of potential oversupply [10]

Core Viewpoint - The article emphasizes that the influx of copper supply into the U.S. market due to tariff expectations is creating a "must rise" market structure for copper prices, presenting a significant opportunity for copper bulls, while Asian buyers may be forced to accept high premiums to secure supply [1][3]. Group 1: Market Dynamics - The influx of metals into the U.S. market is leading to a risk of further depletion of copper inventories in other regions globally [3]. - The current market structure is characterized by tight supply and rising prices, which is expected to result in higher premiums for Asian buyers [3][5]. - The U.S. is now the largest consumer of copper globally, with significant premiums observed in New York futures prices compared to London benchmarks [5][6]. Group 2: Price Trends and Predictions - The U.S. copper imports are projected to increase significantly in the coming months, with expectations of reaching record levels similar to those seen in Q2 2025 [4]. - The article notes that the current market dynamics, despite existing surpluses, are leading to price increases, indicating a unique situation in the copper market [4]. - There is a potential scenario where U.S. copper prices could rise to $12,000 or $15,000, which would create a supply shortage in China as buyers return from the Spring Festival [7]. Group 3: Premiums and Competition - Traders are currently pushing up premiums for deliverable copper, with some attempting to purchase Chilean copper at premiums exceeding $500 over LME prices [7]. - Codelco, the largest copper producer, has recently set benchmark premiums above $300 per ton for its customers in Korea and China, shocking Asian buyers [7]. - The article suggests that while Chinese buyers are hesitant about high prices now, they are likely to accept them in the near future as supply tightens [7].

Group 1 - The Panamanian government will release a preliminary report on the comprehensive audit of First Quantum Minerals' Cobre Panama copper mine next week, with a final report expected by the end of February, which will guide the government's next steps for the stalled project [1] - The independent review led by SGS Panama Control Services covers environmental compliance, legal labor issues, tax matters, operational processes, and potential environmental liabilities, and the results will influence future negotiations regarding the mine [1] - The Cobre Panama copper mine was one of the largest in the world before its suspension, with a production of 350,000 tons in 2022, accounting for approximately 5% of Panama's GDP [2] Group 2 - First Quantum Minerals stated that if the mine continued operations, it could contribute $1 billion to the national treasury and generate $2 billion in benefits for local suppliers [2] - The company acknowledged the significant challenges facing the project and emphasized the need to find solutions that balance the interests of stakeholders, the government, and the Panamanian public [2] - The mine has been inactive for about 18 months due to large-scale protests that led to the contract being declared unconstitutional, and restarting operations will take six to nine months, with longer to reach the rated capacity of 10 million tons per year [1]

Core Viewpoint - Jiangxi Province is actively promoting green mining practices, transitioning from extensive mining to sustainable development, which has improved both environmental conditions and production efficiency [1][2][6] Group 1: Green Mining Development - Jiangxi has 593 mining sites, with 262 designated as green mines, including 35 national-level, 180 provincial-level, and 47 municipal-level [1] - The province has implemented the "Jiangxi Province Green Mining Management Measures (Trial)" and other regulations to clarify responsibilities and standardize assessments for green mining [2][3] - By May 2024, Jiangxi has established 60 new green mines, indicating steady progress in green mining initiatives [3] Group 2: Technological Innovation - The City Gate Mountain Copper Mine has improved copper recovery rates by 1.96% and sulfur recovery rates by 15.72% from 2017 to 2024 through technological advancements [3] - New technologies developed for ion-type rare earth mining have significantly reduced wastewater pollution and improved resource recovery rates [3] Group 3: Quality Control and Evaluation - A multi-departmental review system has been established to streamline the approval process for green mining applications, enhancing efficiency and consistency [4][5] - From 2021 to May 2023, 70 non-compliant mining enterprises were removed from the green mining list, reinforcing accountability [5] Group 4: Community Impact - Green mining initiatives have resolved conflicts between local communities and mining companies, improving local infrastructure and providing stable employment opportunities [6] - Legal agreements have been established to ensure compliance with green mining standards, preventing neglect of management [6] Group 5: Future Goals - By the end of 2028, 90% of large and 80% of medium-sized operating mines in Jiangxi are expected to meet green mining standards [6][7] - The provincial government emphasizes the need for continuous improvement and accountability in green mining practices [7]

Core Viewpoint - Barrick Mining Corp remains committed to the Reko Diq copper project in Pakistan, which is one of the largest undeveloped copper mines globally, with an investment of up to $7 billion and expected production start by the end of 2028 [1] Group 1: Project Details - The Reko Diq project is a joint venture between Barrick and the Pakistani government, highlighting its significance for both parties [1] - The project is expected to add 13 million ounces of gold reserves for Barrick in 2024 and produce 200,000 tons of copper annually in its first phase, with potential doubling after expansion [1] - Over a 37-year period, the project is anticipated to generate over $70 billion in free cash flow [1] Group 2: Challenges and Financing - Security issues in the Balochistan province pose a major challenge for the project, as the area frequently experiences attacks [1] - Upgrades to the railway infrastructure are necessary to transport copper concentrate to Karachi for overseas processing [1] - Multiple lending institutions, including the International Finance Corporation and the Asian Development Bank, are working to raise over $2.6 billion in financing for the project [1]

Core Viewpoint - Harmony Gold has approved an investment of $1.55 to $1.75 billion for the development of its copper mining project in Australia, diversifying its operations amid rising gold mining costs in South Africa [1] Group 1: Investment and Project Details - The investment will be implemented in phases over three years, funded by internal cash flow and capital-efficient debt instruments [1] - The Eva copper project, acquired in 2022, is expected to produce approximately 65,000 tons of copper concentrate annually in the first five years, averaging 60,000 tons of copper and 19,000 ounces of gold per year over a 15-year lifespan [1] Group 2: Market Outlook and Production Expectations - Production is anticipated to commence in the second half of 2028, coinciding with a projected supply gap in copper, which is expected to support rising copper prices [1] - The CEO stated that combined production from the recently acquired MAC Copper project and the Eva copper project is expected to reach around 100,000 tons of copper annually [1] Group 3: Strategic Rationale - The project is positioned to benefit from strong copper fundamentals and the current robust gold price, presenting significant upside potential [1] - The long-term outlook for copper and gold is positive, with the Eva copper project expected to generate strong cash flow and substantial profits while reducing overall risk [1]

Core Insights - African Rainbow Minerals (ARM) is making a significant investment in the copper sector by establishing a joint venture with Newmont Corporation in Papua New Guinea, which is expected to be one of the largest investments in critical minerals [1] - ARM's chairman, Patrice Motsepe, emphasizes that this investment aligns with global decarbonization trends and the increasing demand for copper, positioning ARM as a participant in the transition to a low-carbon world [1] - ARM has 13 billion rand in cash and an additional 7 billion rand in undrawn credit, with a substantial portion earmarked for copper-rich regions like Australia and Papua New Guinea [1] Investment Strategy - ARM is seeking to invest between 4 to 5 billion dollars in Papua New Guinea through its partnership with Newmont [1] - Harmony Gold Mining Company, influenced by Motsepe's 10.9% stake, is also shifting its focus towards the copper industry, aiming to transform into a global producer of gold and copper [2] Market Dynamics - Copper is essential for electric vehicles, technology, water, renewable energy, and grid infrastructure, making it a key component in energy transition and decarbonization [3] - Despite a sluggish copper industry in South Africa, production increased by 6.7% year-on-year in July, with copper sales rising by 19.7% [3] - The South African government emphasizes the need to redefine the mining sector, with key minerals like copper, manganese, nickel, and platinum forming the backbone of new industrial strategies for green manufacturing and battery value chains [4] Future Projections - The International Energy Agency (IEA) predicts that demand for copper in clean energy technologies will double by 2040 due to the expansion of grids, electric vehicles, and renewable energy systems [4] - The copper market in Africa is expected to reach 3 million tons by 2035, with analysts warning that this figure could rise to 6.5 million tons [4] - Without the commissioning of new large mines, a supply shortage is anticipated in the early 2030s, highlighting the importance of ARM and Harmony's overseas copper operations for maintaining competitiveness [5]

Core Insights - Codelco has signed an agreement with India's Adani Group to explore copper mining projects in Chile [1] - The agreement includes the evaluation of three copper projects and establishes a framework for potential joint development [1] - The non-binding agreement between Codelco and Adani's subsidiary Kutch Copper involves the exchange of technical and legal information regarding the three copper projects [1] - Adani's CEO Vinay Prakash emphasized the establishment of a cross-border cooperation model to ensure a long-term supply of copper for India [1] - Codelco, as the world's largest copper producer, is actively enhancing international collaboration [1]