Copper and everything related to it is rallying once again today. It's a theme I've been writing about for years.
The Scotiabank metals team put out their latest valuation check on the base metals mining space and the takeaway is that things are starting to look reasonable — but not cheap.
Cu miners are now trading at an average implied copper price of $6.48/lb, which is a record high in absolute terms but only a 12% premium to spot at $5.78/lb. That 12% premium has come up from just 3% at the start of the year, but it's still well below the three-year average of 19%. So the market is pricing in some optimism, but nothing crazy.
The names Scotiabank likes on a relative value basis are First Quantum (FM) and Ivanhoe Mines (IVN) — both look meaningfully undervalued versus peers. On the other side, Antofagasta (ANTO) and Southern Copper (SCCO) look stretched, and Scotiabank rates both Sector Underperform.
What's interesting is the disconnect between spot valuations and Scotiabank's own price deck. At spot, the large/mid-cap copper producers trade at 8.4x 2026 EV/EBITDA and a 1.22x P/NAV — both reasonable. But plug in Scotiabank's lower commodity assumptions and those numbers balloon to 9.9x and 1.99x respectively. That tells you the market is broadly pricing in copper staying elevated.
Scotiabank's price deck vs. spot:
| Commodity | Spot | 2026E | 2027E | 2028E | Long-Term |
|---|---|---|---|---|---|
| Copper (US$/lb) | $5.78 | $5.50 | $5.25 | $5.25 | $4.50 |
| Gold (US$/oz) | $5,099 | $4,600 | $4,600 | $4,400 | $3,400 |
| Silver (US$/oz) | $84.40 | $65.00 | $50.00 | $45.00 | $40.00 |
| Nickel (US$/lb) | $7.78 | $7.50 | $7.50 | $7.50 | $9.00 |
| Zinc (US$/lb) | $1.50 | $1.40 | $1.40 | $1.35 | $1.30 |
| Iron Ore (US$/t) | $99 | $97 | $91 | $91 | $91 |
| Uranium (US$/lb) | $89 | $80 | $80 | $80 | $75 |
The gap between spot and the price deck is massive in gold and silver especially. Gold at $5,099 spot versus a $4,600 deck for 2026 and a $3,400 long-term assumption — that's a big bet that the current rally fades. Silver is even more dramatic: $84.40 spot versus $65 next year and $40 long-term. Copper is more modest — $5.78 spot vs $5.50 for 2026 — but they're still looking for a grind lower to $4.50 long-term.
The broader point about volatility is worth flagging too. Mining equities are swinging 5% a day right now, driven partly by AI/data centre sentiment bleeding into the commodities space. That kind of volatility creates opportunities if you have conviction on the commodity outlook.
Target changes: FM to C$46 from C$45, TECK.B to C$80 from C$75, LUN to C$36 from C$35, IVN cut to C$20 from C$21.
The TECK target bump reflects the implied Anglo American takeover value — that story continues to be the key driver there.
Here is a look at the copper ETF COPX, which is up 2.6% today.
