UBS: Increased copper prices forecast to raise target prices for Luoyang Molybdenum (03993) and Zijin Mining (02899)

The Zhitong Finance App learned that UBS released a research report saying that it raised the 2025 and 2026 copper price forecasts by 7% and 4%, respectively, to 4.24 US dollars and 4.68 US dollars per pound, reversing the previous more cautious demand outlook, and the biggest impact of tariff uncertainty has subsided. UBS raised the target price of Zijin Mining (02899) by 7% to HK$25.3, and raised the target price of Luoyang Molybdenum (03993) by 12.5% to HK$9.9, reaffirming the ratings of the two companies as “buy”.

Tariffs uncertainty may lead to a slowdown in terminal demand, but UBS's benchmark scenario assumes that demand will return to trend levels over the next 12 months, and the slowdown in Chinese demand growth will be offset by recovery in traditional European and US terminal markets, which are supported by replenished inventories and long-term drivers (including electrification, German fiscal policy, defense, and artificial intelligence). UBS maintains a fairly optimistic view of copper prices, supported by favorable supply-side dynamics and long-term demand drivers.

As a result, UBS raised Luoyang Molybdenum's profit forecast for 2025 by 15% and by 8% in 2026. Considering steady copper prices and potentially strong copper sales volume (copper sales are expected to be 170,000 tons in the second quarter of 2025, compared with 124,000 tons in the first quarter), Luoyang Molybdenum's second-quarter results should be strong. UBS also raised Zijin Mining's profit forecast for 2025 by 7% and by 3% in 2026 to reflect improvements in copper and gold prices, but this was partly offset by loss of production in Kamoa (the Central African Katan copper-cobalt belt). In the bank's model, Camoa's production from 2025 to 2027 has been reduced to 400,000 tons, 440,000 tons, and 540,000 tons, respectively.