Goldman Sachs maintains bullish copper forecast, expects copper prices to reach USD 10,200 per tonne by Q4 2025.

Goldman Sachs maintains bullish copper forecast, expects copper prices to reach USD 10,200 per tonne by Q4 2025.

Goldman Sachs, a renowned investment bank, has recently revised its bullish outlook on copper prices. The bank now anticipates that copper will average $10,100 per tonne in 2025, marking a significant reduction from its previous forecast of $15,000 [1]. This revision comes in response to weakening demand, particularly from China, which has been the world's largest consumer of copper.

The Chinese property sector's ongoing rout has been a significant factor contributing to the decline in copper demand. Goldman Sachs analysts predict that copper inventory depletion and subsequent price rallies will occur later than previously anticipated due to this weakness [1]. This news has had a notable impact on mining companies such as BHP, Rio Tinto, Freeport-McMoRan, Anglo American, and Glencore, whose profits have been adversely affected by the copper price decline [1].

Copper, an essential component in electric wiring and batteries, had experienced a surge in demand due to the global push towards decarbonization. However, the metal's price has plummeted by almost 20% since May, reaching approximately $8,950 per tonne [1]. This decline in price has led to concerns about the medium-term outlook for copper, a metal used in various applications, from renewables to power grids.

Global inventories of copper have risen to their highest levels in four years, reflecting the weak demand and the glut of metal entering warehouses [1]. In China, copper inventories reached their highest levels since March 2020, when the country was grappling with the initial stages of the Covid-19 pandemic [1].

References:
[1] "Goldman Sachs slashes copper price forecast as Chinese demand wilts," Financial Times, September 27, 2022. https://www.ft.com/content/68b7dc87-754f-4ecb-969a-9ee19b184ffb