Key Takeaways
- Bank of America and Goldman Sachs both have 12-month copper price targets of US$5.50/lb, up from the current spot price of approximately US$4.60/lb.
- The options market is showing unusual call activity in the US$5.50–6.00/lb strike range, suggesting institutional investors are positioning for a breakout.
- Scotia Capital has a more cautious near-term target of US$5.00/lb but acknowledges the medium-term bull case is building.
- For Canadian copper producers, a move to US$5/lb would translate to significant margin expansion and potential for special dividends or buybacks.
Copper’s push toward US$5.00 per pound is testing a level that has proven elusive since the brief spike of mid-2022. COMEX copper futures settled at US$4.87/lb on Thursday up 28% from the January 2026 low of US$3.80/lb and options market activity suggests traders are increasingly positioned for a sustained move above US$5.00. The question commodity strategists are wrestling with is whether this is a cyclical rally driven by short-term supply tightness, or the early stages of a structural re-rating.
What Bank of America Is Saying
Bank of America’s commodity research team, led by Michael Widmer, has been among the most bullish on copper for the past two years. In their most recent note, published June 30, the team maintained a 12-month price target of US$5.50/lb and a 2028 target of US$6.00/lb. Their bull case which requires Chinese grid investment to accelerate and no major new mine supply surprises pencils out at US$7.00/lb by 2029.
BofA’s key argument rests on the mine supply side: they estimate that, at current capital allocation rates, the industry is deferring or cancelling approximately 1.5 million tonnes per year of future mine production supply that the market will need by 2028. “The market is pricing in a supply response that isn’t happening,” Widmer wrote.
Goldman Sachs: US$5.50/lb in 12 Months
Goldman’s commodity team has a 12-month copper price forecast of US$5.50/lb, driven primarily by what they characterize as “the most significant structural demand shift in copper’s history.” Goldman’s model weights AI data centre copper demand often overlooked relative to EVs as a major incremental source over 2026–2030. A single hyperscale data centre campus can require 30–50 million pounds of copper in wiring, busbar, transformers, and cooling systems.
Scotiabank: More Cautious, But Still Constructive
Scotiabank’s metals desk which covers the copper market with particular focus on Canadian and Latin American producers takes a more measured view. Their base case copper price for 2026 is US$4.80–5.00/lb, rising to US$5.20/lb in 2027. Head of metals research Hugo Nicolás Sarmiento-Piñero noted in a June 2026 research note that near-term Chinese demand “remains the key variable” and that the current rally has components of speculative positioning that could unwind quickly on weak Chinese PMI data.
Scotia’s preferred way to play the copper theme among TSX names is through Teck Resources and Ero Copper companies with low-cost operations and improving production profiles that would benefit from even a modest price increase, let alone a sustained move toward US$5.50.
Options Market Signals
The COMEX copper options market is flashing constructive signals. Open interest in call options at the US$5.00 strike for September 2026 delivery has increased by 340% over the past six weeks. The implied volatility skew has shifted toward calls, suggesting that hedgers and speculators alike are increasingly positioned for upside rather than downside.
| Institution | 12-Month Target | 2027 Target | Key Risk |
|---|---|---|---|
| Bank of America | US$5.50/lb | US$6.00/lb | Chinese property slowdown |
| Goldman Sachs | US$5.50/lb | US$5.80/lb | US recession risk |
| Scotiabank | US$5.00/lb | US$5.20/lb | Chinese demand variability |
| BMO Capital Markets | US$5.20/lb | US$5.50/lb | Supply ramp from Kamoa-Kakula |
| TD Securities | US$5.30/lb | US$5.60/lb | DXY strength |
What US$5/lb Means for Canadian Producers
For TSX-listed copper producers, the move from US$4.50 to US$5.00/lb translates directly into dramatic margin expansion. Teck Resources, with QB2 cash costs around US$1.75/lb, would see its operating margin per pound increase by approximately 18% at US$5.00 versus US$4.50. Ero Copper, with even lower costs (approximately US$1.40/lb), would see a proportionally larger benefit. Hudbay Minerals with higher-cost operations would see less leverage but still meaningful improvement.
At US$5.00/lb copper, consensus estimates for Teck’s 2026 adjusted EBITDA rise to approximately C$4.8 billion implying the stock currently trades at roughly 5x EBITDA, a discount to its historical average and to global peers. This valuation gap is one reason the analyst community remains broadly constructive on the TSX copper complex.
Boreal Markets and SmallCap Communications Inc. are not registered investment advisers.
Always conduct your own due diligence before making investment decisions.
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