Mining Equities "Divergence" Major

Research evidence excerpt

Mining Equities "Divergence" Major

Jones

assuming the Strait of Hormuz remains open, energy linked/sulphur costs should Analyst

andrew-i.jones@ubs.com

normalise by end-2026; as a result, we expect the market to largely look through two

+44-20-7901 6545

quarters of higher costs. For base/bulks, the mark to market on 2026/27 numbers is

mixed (vs 20% downside in golds). Steve Friedman

Analyst

steve.friedman@ubs.com

Commodity outlooks & preferred mining equites

+27-11-322 7252

Copper: Despite a mixed near-term demand outlook, we think the positive fundamental

Alex Stansbury, CFA

outlook for copper based on supply constraints vs resilient demand from energy

transition is unchanged/arguably more compelling after the ME conflict. We alex.stansbury@ubs.com

acknowledge visible inventories are elevated but much of this (in US) may not be +1-212-882 0097

available to the market and the potential for strategic stockpiling limits near-term

Ethan Hong

downside in a weaker underlying demand environment. Although weaker demand vs

Associate Analyst

resilient smelter output has reduced near-term deficits, we remain constructive on the ethan.hong@ubs.com

long-term outlook. We have good visibility on limited mine supply over the next 1-3 +1-212-649 8258

years (with new FIDs & higher capex to impact supply from 2030) and expect resilient

demand to drive deficits that will erode elevated inventories and support sustainable

price upside.

Copper equities have been re-rating for a number of years; in our view, this is

sustainable and will continue. Copper has 'AI basket' characteristics and stocks have

further downside in an AI sell-off scenario; but we ultimately see recent weakness as a

buying opportunity and prefer stocks rich with catalysts that are trading at discounted