Jefferies: "Turns Out, We Weren't Bullish Enough On Copper"

"Turns out, we weren't bullish enough on copper," Jefferies analyst Christopher LaFemina wrote in a note to clients, marking a notable shift from one of Wall Street's most seasoned metal voices. LaFemina joined Jefferies in 2011 after more than a decade covering metals and mining at Lehman Brothers and Barclays, lending weight to his view that the explosive growth in AI data center buildouts, power grid and infrastructure upgrades (a theme he calls "powering up America"), and tight supply are creating structurally higher prices for copper.

LaFemina raised his 2030 target and now expects copper to average $8 per pound, or $17,636 a ton. COMEX copper last traded around $6.34 a pound, while LME copper was near $13,583 a ton.

On a longer timeframe, the LME copper chart suggests the $10,000 level was the breakout zone, further supporting LaFemina's 2030 target given the current supply-tightening backdrop.

"Turns out, we weren't bullish enough on copper," LaFemina said, adding, "We now have the highest copper price forecast on the Street as we see strong US industrial demand and still tight supply."

He noted that the data center and power infrastructure buildout should drive a meaningful acceleration in metals demand, with copper and aluminum prices able to rise much higher before weighing on the broader economy.

Goldman recently estimated that AI capital expenditures by hyperscalers will soar to $800 billion this year. The report can be found here.

In recent weeks, Goldman raised its year-end copper price target, and HSBC warned (report found here) that commodities face a "super-squeeze."

HSBC analysts told clients last week that "metal prices are generally in an upswing, driven by supply disruptions for some commodities due to the Middle East conflict and strong structural demand."

Separately, Goldman analysts led by Aurelia Waltham explained that one of the core issues with the copper market right now is supply:

• Year-to-date data does suggest that supply recovery from previous disruption events has trailed our expectations. Accordingly, we lower our 2026 global mine supply forecast by 350kt, equivalent to ~1.5% of global mine supply, including ~200kt less from Grasberg (Indonesia) and Kamoa-Kakula (DRC) combined, with neither returning to full capacity until 2028.

At the same time, Waltham said stronger-than-expected U.S. copper imports in the first half of 2026 are tightening the ex-U.S. market:

• Furthermore, US copper imports in H1 2026 have exceeded our previous forecast, tightening the ex-US balance. As a result, we now expect US inventory to build by 900kt in 2026 (vs. 550kt previously), even as our base case remains that no copper tariff will be announced this year.

The combination of soft mine supply, U.S. stockpiling, tariff uncertainty, and long-term demand tied to AI buildout and grid-upgrade themes prompted Waltham to upgrade her end-of-year 2026 and 2027 copper price forecasts:

• We raise our end-2026/average 2027 LME copper forecasts to $13,735/$13,800 from $12,465/$12,150 previously (vs. forwards at $13,630/$13,610).

She outlined three price scenarios for copper:

1. Strait of Hormuz Remains Closed for Longer: While we would expect limited impact on the global copper balance as the demand hit from lower economic growth is largely offset by lower copper supply due to sulfur shortages, a substantial pullback in global risk appetite could push the LME price down to its fundamental support level at ~$12,600 in H2 2026, before resuming an upward trend.

2. US Copper Tariff Announced for January 2027: If a US copper tariff is announced prospectively in June 2026, to start in January 2027, we would expect US copper imports to accelerate in H2 2026 (vs. our base case of a slowdown in imports), tightening the ex-US balance and raising prices to over $14,000 in H2 2026. However, we would expect prices to retreat in 2027 as imports stop once the tariff is imposed.

3. Announcement of No Copper Tariff: A definitive decision against the tariff would reduce the size of our ex-US deficit forecast in 2026 and push the ex-US market back into surplus in 2027 as imports fall to a negligible level. In this scenario, we would expect the price to fall to an average of $12,800/t in 2027.

View scenarios here:

Beyond Jefferies, HSBC, and Goldman, JPMorgan analysts have also told clients that the copper upcycle is being driven by a tightening supply backdrop, accelerating power-grid investment, AI data center demand, and broader industrial electrification. Taken together, some of Wall Street's top metals desks are increasingly converging on the view that copper is entering a structurally tighter supply regime that will support a sustained break above $14,000 a ton on the LME.