Goldman goes cold on copper price
The dollar’s surge has weighed significantly on copper and the global energy squeeze that’s threatening growth is “heavily skewed toward escalation into winter,” analysts including Nicholas Snowdon said in an emailed note.
The bank sees copper at $6,700 a tonne in the coming three months, versus an earlier forecast of $8,650.
Click here for an interactive chart of copper prices
Bank of America also slashed its forecasts last week, warning that in a worst-case scenario where Europe experiences widespread gas shortages, prices could plunge to as low as $4,500 a tonne.
Copper fell 3.15% Tuesday morning to $3.32 ($7,307) a tonne on the Comex market in New York, the lowest since November 2020.
The copper market is facing a surplus for the coming two years as demand wanes and mines keep expanding, Marcus Garvey, head of commodities strategy at Macquarie Group said at an online LME seminar on Tuesday. Absent more supply shocks, the metal’s performance will come down to global growth, he said.
“The downward spiral in copper price that has gathered momentum in recent sessions reflects increasingly pessimistic growth expectations,” Goldman said in its note.
“This latest leg lower has been tied to increasing headwinds to European growth path, in particular from the impact of surging regional natural gas prices on activity.”
Still, the bank said copper was on track to reach $15,000 in 2025, citing a “clear structural bull story” as mine supply peaks.
It sees copper at $7,600 in six months and at $9,000 in 12 months, versus previous forecasts of $10,500 and $12,000.
(With files from Bloomberg)
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