Microwave: Copper and global GDP

Global | Metals & Mining Macrowaves: Copper and Global GDP The copper price in real terms is slightlyhigher than it was in 2011, which was thepeak year of the China Supercycle, but copper The global economy has become more copper-intensive since the peak of theChina Supercycle in 2011. Copper's increased importance due to functionalfactors reduces the risk of substitution and suggests further price upside in theyears ahead. We forecast a peak, risk-adjusted annual average price of $6.50/ Copper is Becoming More Important:Growth in global demand for copper in tonnes has exceededgrowth in real global GDP by more than 20% since 2011 (Exhibit 1). This implies that the globaleconomy has become more copper-intensive since the peak of the China Supercycle 15 years ago.We can see this as well if we compare the value of the copper market (total tonnes consumedx average copper price) to growth in nominal global GDP over the same period (Exhibit 2).Thebottom line is that each unit of GDP effectively requires more copper today than it did 15years ago.This may be a counter-intuitive conclusion as growth in the global economy since Source: Wood Mackenzie, World Bank, IMF, FactSet, JefferiesCopper consumption is measured in tonnes. GDP ismeasured in USD. Where the Copper Cycle is Heading:The consensus view is that the copper price is "high". Based onhistoric prices, this conclusion is difficult to argue against (Exhibits 3 and 4). However, the coppermarket is changing as new, rapidly growing end markets are arguably less price-elastic than historic,highly cyclical end markets. We expect the copper-intensity of the global economy to continue toincrease, which implies that global copper demand should grow faster than global GDP for the nextseveral years. This is a setup for higher prices. While we model a conservative price deck due tocyclical demand risks, with a peak, risk-adjusted price forecast of $6.50/lb in 2030, we believe this Our Picks:We are bullish the metals and mining sector vs the equity markets in general, and copperis our top commodity choice for a 3-5 year horizon. Freeport, First Quantum, Anglo American andTeck Resources are our preferred copper miners due to idiosyncratic factors, but we expect a rising Christopher LaFemina, CFA * | Equity Analyst(212) 336-7304 | clafemina@jefferies.comGiovanni Holmes ^ | Equity Associate +44 20 7548 4172 | gholmes@jefferies.com Growth in global demand for copper in tonneshas exceeded growth in real global GDP bymorethan 20%since 2011.This implies The total nominal value of the copper market(average price * tonnes consumed for eachyear) has increased more than nominal global The LME copper price is near its all-time highin nominal terms. The copper price in real terms (if we use US CPIas the deflator) is near the top of its historicrange and well above the average of the past Company Valuation/Risks Anglo AmericanOur price target is SoTP-based. Key risks include commodity prices and geopolitical and operational risks. First QuantumOur price target is NPV-based. Key risks include copper price, geopolitical, and project development. Freeport-McMoRanOur price target is risk-adjusted fair value average. Key risks include copper prices and operational risk. Teck Resources LimitedOur price target is based on our SoTP analysis. Key risks include macro, operational, and geopolitical. Analyst Certification: I, Christopher LaFemina, CFA, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies)and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or I, Giovanni Holmes, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed Registration of non-US analysts:Giovanni Holmes is employed by Jefferies International Limited, a non-US affiliate of Jefferies LLC and is not registered/qualified as a research analyst with FINRA. This analyst(s) may not be an associated person of Jefferies LLC, a FINRA member firm, and therefore may not As is the case with all Jefferies employees, the analyst(s) responsible for the coverage of the financial instruments discussed in this report receives compensationbased in part on the overall performance of the firm, including investment banking income. We seek to update our research as appropriate, but various regulations Investment Recommendation Record (Article 3(1)e and Article 7 of MAR)Recommendation Published May 6, 2026 12:28 P.M. Company Specific Disclosures Within the past 12 months, Jefferies Financial Group Inc., its affiliates or subsidiaries has received compensation from investment banking servi