🔴 [E2420] Not all base metals benefit from supply constraints. Nickel market expected to remain in surplus by 188,000 tons with robust Indonesian output despite new mining quotas. Zinc expected to shift from balanced to surplus of 136,000 tons, with prices projected to slide to USD 2,950/mt. Lead surplus should keep prices around USD 2,100/mt.

🟢 [E2368] UBS projects copper at USD 14,000/mt by year-end 2026, with a market deficit of 407,000 mt. Supply constraints persist from elevated disruption allowances (~6% of global mine supply), output lagging capacity expansions, and inventories outside US at structurally low levels. Chilean mine supply pressured by lower ore grades; Teck Resources cut 2025-2026 guidance by 60,000-90,000 tonnes.

🟢 [E2369] Copper concentrate market in China remains tight, with supply lagging behind expanding smelter capacity. UBS expects tightness in both concentrate and scrap markets to slow refined copper output, resulting in market deficit with further risk of widening shortfalls. Robust grid investment and electrification efforts support demand despite property sector weakness.

🟢 [E2370] UBS recommends a yield pickup strategy in copper, selling downside risk below USD 12,000/mt over three months. Their constructive long-term outlook is underpinned by limited mine supply growth, potential manufacturing recovery in 2026, robust structural demand from electrification (EVs, renewables, data centers), and low inventory levels outside the US.

🟢 [E2386] Aluminum faces supply uncertainty with China operating near 45 million metric ton capacity cap. Robust domestic demand absorbs much output with exchange inventories set to decline. Higher prices or lower energy costs needed to incentivize supply growth outside China. UBS expects aluminum market deficit of 309,000 tons in 2026 vs modest surplus of 200,000 tons in 2025.

💬 [E2421] UBS notes ongoing concerns about inflation, particularly in the US, could make real assets appealing to investors. Continuing resource nationalism is likely to support demand and create challenges for supply chains. Trade-related issues continue, especially among US, Latin America, and China, with significant short positions creating upside-skewed price risks.

🟢 [E2383] UBS cites weaker US dollar in first half of 2026 as key driver for precious metals and commodities. Dollar depreciation was among factors driving 2025 precious metals outperformance (75-80% returns). Oil demand outlook underpinned partly by weaker US dollar supporting emerging market consumption.

🟢 [E2392] UBS recommends long agriculture via second-generation index targeting +10% gain with -5% stop loss. Strategy underpinned by expected peak grain inventory-to-use ratios, unpriced geopolitical and weather risks, and low speculator net-short positions that could trigger rapid short covering. Agricultural exposure offers diversification benefits.

🟢 [E2416] UBS recommends long sugar via second-generation index targeting USD 0.17/lb with stop loss at USD 0.14/lb from current USD 0.149/lb. India's biofuel policies expected to decrease exports; higher crude oil prices to raise Brazilian ethanol margins, diverting more cane from sugar to ethanol. Sugar surplus expected to peak over Q1.

🟢 [E2379] UBS projects platinum at USD 2,500/oz (raised by USD 650/oz) and palladium at USD 1,800/oz (raised by USD 300/oz) driven by solid investment demand. The European Commission's plan to ease the 2035 ban on combustion engines contributed to platinum exuberance. China's new physically backed platinum and palladium futures contracts on Guangzhou Futures Exchange provided support.

🟢 [E2389] UBS recommends long agriculture via second-generation index targeting +10% gain with -5% stop loss. Position underpinned by expected peak grain inventory-to-use ratios, unpriced geopolitical and weather risks, and low speculator net-short positions that could trigger rapid short covering. Agricultural exposure offers diversification benefits.

🟢 [E2390] UBS recommends long sugar via second-generation index, targeting USD 0.17/lb spot price with USD 0.14/lb stop loss from current USD 0.149/lb. India's biofuel policies expected to decrease exports; higher crude prices to raise Brazilian ethanol margins diverting cane from sugar to ethanol. Sugar surplus expected to peak in Q1.

🟢 [E2391] US cattle sector remains primary contributor to livestock strength as USDA data indicates ongoing supply shortages. Beef cow culling rates projected just over 8%, below long-term average. Higher heifer retention likely to push live cattle prices up. Per capita beef supply expected to hit lowest point in ten years despite relaxed trade restrictions.

🟢 [E2375] UBS projects diversified commodity indexes to deliver high-single-digit spot returns plus ~3% cash collateral returns minus ~1% roll losses, totaling ~10% returns with volatility expected at 10-15%. Commodities offer diversification benefits with low correlations to equities. Resource nationalism is likely to support demand and create supply chain challenges.

🟢 [E2376] UBS favors broad commodity exposure via actively managed strategies. The significant variation in performance across sectors (precious metals +75-80%, industrial metals +21-29%, livestock positive, energy and grains negative in 2025) supports active management. Correlations within commodities remain low at about 0.2, providing diversification benefits.

💬 [E2412] UBS recommends that commodity pullbacks of 5-10% at the index level should be seen as normal in face of downside risks and should be bought. Key risks include weaker-than-expected China data, doubts about stimulus effectiveness, and possibility of higher US inflation or Fed policy shift away from rate cuts.

🟢 [E2374] US natural gas exports require higher prices to incentivize sufficient production growth. UBS projects dry gas production to rise by nearly 3 bcf/d in 2026. LNG exports expected to rise by ~3.5 bcf/d and pipeline exports to Mexico by ~0.5 bcf/d. Export growth is the main upward driver for prices despite record-high production in December 2025.

🟢 [E2373] UBS retains constructive oil outlook driven by rising oil demand, stalling non-OPEC+ supply in 2H26, and dwindling OPEC+ spare capacity. Energy appears undervalued, trading near production costs. If prices remain low, US shale output may only grow slightly—or even decline. Even minor shortages could drive prices higher in late 2026.

🟢 [E2372] UBS forecasts Brent crude at USD 67/barrel by year-end 2026, with WTI at USD 3 discount. While the market is currently oversupplied, UBS projects the surplus will reduce over the year with possibility of moving into deficit in 2027. Global oil demand expected to rise by ~1.2 million barrels per day in 2026, while non-OPEC+ supply growth expected to slow to 0.8 mbpd.

🟢 [E2393] Oil demand growth led by emerging markets in 2026: China +0.2 mbpd, India +0.2 mbpd, other EM Asia +0.3 mbpd, Africa +0.2 mbpd, Middle East and Latin America each +0.1 mbpd. OECD demand only marginally increasing at +0.2 mbpd. Total global demand growth projected at 1.2 mbpd underpinned by improved economic conditions, stimulus, and weaker dollar.

🟢 [E2385] Newcastle coal prices forecast at USD 110/mt for 2026, slightly above marginal production costs. USD 100/mt expected to act as soft floor. China government campaigns targeting overproduction and environmental safety checks constraining supply growth. Emerging Asia (India, Vietnam, Indonesia) maintaining robust demand with continued coal plant investment.

🟢 [E2365] UBS forecasts gold at USD 5,000/oz through the first three quarters of 2026, easing to USD 4,800/oz by year-end, with an upside case of USD 5,400/oz if political or financial instability intensifies. Central bank acquisitions projected at 950 metric tons in 2026, with substantial ETF inflow growth expected. Gold's appeal is enhanced by subdued real yields, persistent geopolitical risks, and concerns over fiscal deficits in major economies.

🟡 [E2387] UBS warns that higher US interest rates and a stronger dollar could drive down precious metals prices, potentially causing double-digit percentage reversals, with silver being especially vulnerable. After significant 65-148% price increases in 2025, further gains may be limited unless there are major shocks to economic policy or interest rates.

🟢 [E2367] Silver forecast raised to USD 100-105/oz in the near term (up from USD 85/oz), with year-end 2026 target at USD 85/oz (up from USD 70/oz). The silver market is expected to experience a deficit approaching 300 million ounces in 2026. The gold-silver ratio has fallen firmly below historical average, with ratio at ~50 supporting silver prices around USD 100/oz.

🟢 [E2366] UBS maintains a long gold position recommendation, citing gold's role as a hedge against adverse political, macroeconomic, and financial market developments. Fiscal excesses in the US, Europe, and other major economies are driving strong demand. The combination of strong ETF investment demand and robust central bank purchases should outweigh lower jewelry purchases and push prices to new highs.

🟢 [E2388] Palladium maintains undersupplied market, reaching levels not seen in nearly three years. Discount to platinum expected to prompt substitution in autocatalysts (90% of demand). UBS forecasts year-end palladium at USD 1,800/oz. Market limited size and low trading volumes mean only high risk tolerance investors should consider.

🟢 [E2418] US soybean crush at record pace with monthly crush reaching 225 million bushels (4.2% rise from November, second-highest ever). Year-to-date crushing up 11.5% vs USDA anticipated 5.1% growth. Renewable diesel capacity expansion has strengthened demand for soybeans, canola, and used cooking oil. EPA to finalize biomass-based diesel mandates of 5.2-5.6 billion gallons (~30% increase over 2024).

💬 [E2384] UBS notes markets may be underestimating possible supply interruptions in oil. Supply disruptions in Kazakhstan and cold weather in Northern Hemisphere could result in less oversupplied market in Q1 2026. Constructive outlook driven partly by dwindling OPEC+ spare capacity and potential for minor shortages to drive prices higher in late 2026.

🟢 [E2417] UBS highlights elevated weather-related uncertainties in 2026 as ENSO patterns swing from La Niña to El Niño, traditionally raising climate-related risks. Grain prices are at half-century lows in real terms. Weather or political events pose both risks and opportunities. Short positions across agriculture remain elevated, creating potential for rapid short covering.

🟢 [E2382] UBS's constructive commodity outlook is underpinned by 2025 interest rate reductions with supportive effects extending into 2026. Continued government expenditure across US, Europe, China, and Japan contributes to positive momentum. A sudden slowdown in US or China could lead to brief declines, but with more room to cut rates, any downturn would likely last only 3-6 months.

🟡 [E2408] UBS identifies a key risk: if US interest rates were hiked due to increasing inflation pressure and retightening labor market, this would have more lasting negative effect on commodity prices, especially precious metals. They do not expect the Fed to tighten in near future, particularly as current administration favors lower rates before midterm elections.

🟢 [E2380] UBS recommends commodities for portfolio diversification with ~10% total return expectation and 10-15% volatility. Low correlations with equities provide diversification benefits. Rising prices benefit yield-focused strategies. Specific strategies include selling downside in copper below USD 12,000/mt, selling silver downside from USD 71/oz, and long sugar targeting USD 0.17/lb.

🟢 [E2381] UBS recommends a yield pickup strategy in silver, selling downside risk from USD 71/oz over three months to capture additional yield given 60% option volatility. Extreme high option volatility and atypical downward-sloping forward curve present unique opportunities for volatility selling strategies rather than outright exposure.

🟡 [E2378] UBS identifies key macro risks: sudden slowdown in US or China could lead to 3-6 month declines. China domestic data remained soft heading into year-end with structural issues and potential top in export growth. Higher US inflation risk and Fed rate hikes would have lasting negative effect on precious metals — potentially double-digit reversals.

🟢 [E2377] UBS projects G7 economic strengthening with developed markets potentially reaching near 2% growth, emerging markets stable above 4%. Corporate profit growth expected to accelerate from high-single-digits in 2025 to low teens in 2026. Historical analysis shows profit upswings fuel increased capital expenditures, supporting commodity demand.

💬 [E2409] Chinese domestic data remained soft heading into year-end. UBS expects more policy support from China to halt the recent slump in activity figures. A slower economic pace and ongoing structural issues—alongside potential peak in export growth—are key factors to watch. China's demand expected to rise by nearly 0.2 mbpd oil, 0.2 mbpd from India.

🟢 [E2371] UBS notes that AI-related global capex expansion will persist, further supporting commodity demand—particularly for industrial metals and critical minerals. Corporate profit upswings historically fuel increased capital expenditures, with G7 economies forecast to strengthen. Copper should specifically benefit from increasing global demand in areas such as electric vehicles, renewables, and data centers.