UBS analysts predict a robust 2026 for critical minerals, including copper, lithium, and gold, driven by increasing demand and constrained supply. Bulk commodities, however, are expected to underperform relative to these critical minerals. The analysts’ report highlights specific companies poised to benefit from these market dynamics.
Copper is forecast to experience tighter supply, pushing the market into a deficit and supporting higher prices. Lithium is a key focus, with demand for battery storage expected to drive prices to $US1800 per tonne for lithium carbonate and $US2850 for SC6 by mid-2026. Gold is also anticipated to benefit from structural demand shifts, with analysts forecasting a 10 per cent increase from current spot prices.
In contrast, iron ore and metallurgical coal are projected to see more modest gains. Iron ore is expected to average around $US100 per tonne in the near term before declining towards $US90 in 2027. Thermal coal prices are expected to remain within a limited range. Aluminium supply caps in China are expected to support positive outlooks for the metal.
UBS identified compelling risk-reward potential in lithium, with ‘buy’ ratings for Liontown, an Australian lithium mining company focused on the development of its Kathleen Valley project, and Mineral Resources, a diversified resources company with extensive operations across multiple commodities, which also received a ‘buy’ rating. Among gold miners, Newmont and Northern Star were also backed with ‘buy’ ratings. Whitehaven Coal was downgraded to ‘sell’, while Coronado Global Resources maintained the same recommendation.
