Copper's Bullish Setup into 2026 and the Implications for Project Developers

Copper’s Bullish Setup into 2026 and Implications for Project Developers

As the copper market moves through late 2025, investor focus is increasingly shifting from near-term price volatility to the structural outlook for 2026. Tight physical conditions, expanding policy support, and a growing body of analyst research point to a market that is likely to remain supply-constrained even as demand continues to grow. Rather than signaling a peak, recent price strength is widely viewed as an early indicator of a tighter balance emerging next year.

Major financial institutions have reinforced this view through updated forecasts. J.P. Morgan Global Research expects the refined copper market to move into a meaningful deficit in 2026, estimating a shortfall of approximately 330 thousand tonnes. The firm projects average copper prices of roughly $12,075 per tonne, with potential upside toward $12,500 per tonne as inventories tighten and supply disruptions persist. UBS has similarly raised its copper price forecasts across 2026, citing elevated supply risk and limited mine growth, with prices expected to trend higher through the year and potentially approach $13,000 per tonne by year end. Even more conservative outlooks project prices remaining well above long-term averages, with several analysts forecasting average prices above $10,600 per tonne in 2026.

The bullish outlook is underpinned by structural demand drivers rather than cyclical recovery alone. Copper consumption continues to be supported by the electrification of transportation, the expansion of renewable energy, grid modernization, and increasing power requirements from data centers. These end markets are expected to grow through 2026 and beyond, while the supply response remains constrained by declining ore grades, long permitting timelines, and capital intensity. Goldman Sachs Research has noted that even if prices moderate from recent highs, demand from power infrastructure and energy transition investment should keep the copper market fundamentally tight later in the decade.

Physical market indicators reinforce this assessment. Inventory levels across major exchanges have shown recurring drawdowns, and shifts in metal flows between regions have highlighted the sensitivity of the market to policy changes and trade dynamics. Supply disruptions remain a persistent factor, including delays in mine restarts and interruptions at smelting facilities that reduce refined output. The International Copper Study Group has also flagged a potential transition from surplus into deficit in 2026 as mine supply growth assumptions are revised lower and refined demand remains resilient, particularly in China, which continues to account for a majority of global copper consumption.

In this environment, capital markets are increasingly focused on development projects that can deliver scale, cost competitiveness, and long-life production. Projects capable of adding meaningful volumes during the second half of the decade are receiving heightened attention as the market looks ahead to a tightening supply outlook. Within this context, Solaris Resources has positioned its Warintza project in southeastern Ecuador as a large, long-life copper asset aligned with anticipated market needs. The company's recently released prefeasibility study outlines a maiden reserve of approximately 1.3 billion tonnes at 0.41 percent copper equivalent, an initial 22-year mine life with potential to extend, and strong early production supported by first quartile all-in sustaining costs. The study also reports robust economic metrics under stated price assumptions, reinforcing the project's potential relevance in a higher-price environment.

Looking forward, the investment case for copper in 2026 is increasingly defined by structural constraints on supply and sustained growth in demand from electrification and infrastructure. While short-term pricing will continue to respond to macroeconomic conditions and policy developments, the prevailing analyst consensus suggests the market is entering a period of sustained tightness. For developers advancing large, well-defined copper projects, the coming year is likely to be focused on derisking development plans and positioning assets to meet a market that appears increasingly supportive as it approaches 2026.