Goldman Sachs lowers copper price forecast, warns that weak demand could trigger a price decline

Investing.com - Goldman Sachs has cut its 2026 copper price forecast from the previous $12,850 per tonne to an average of $12,650 per tonne. The reason is that slower global economic growth has led to weaker demand expectations, but the firm still maintains a long-term bullish outlook driven by electrification.

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The firm currently expects a 490k-tonne supply surplus in the global copper market this year, up from its earlier estimate of 380k tonnes. Previously, Goldman Sachs lowered its forecast for global refined copper demand growth from 2% to 1.6% year over year. This revision was made after Goldman Sachs economists predicted that an energy price shock in the Middle East would reduce global GDP growth by 0.4 percentage points.

The firm’s downgrade to copper demand is smaller than for aluminum; Goldman Sachs attributes this to copper’s increasingly structural role in the global economy.

“This demand revision is smaller than for aluminum because copper demand’s strategic and structural importance has been increasing, reducing its sensitivity to the global economic cycle,” a team of analysts led by Aurelia Waltham said.

In the short term, the team noted that price volatility will persist, but said that if conditions stabilize, copper prices are expected to receive support.

In the base case—assuming that energy flows through the Strait of Hormuz resume starting in mid-April—the firm forecasts that the average copper price in Q2 2026 will be $12,700 per tonne, before gradually falling in the second half to its estimate of fair value of $12,000.

Goldman Sachs also emphasized the risk that the current price may lack fundamental support. Even after the pullback in March, copper prices are still well above the firm’s 2026 fair value estimate of about $11,100, which makes it “prone to falling again when economic prospects deteriorate and investors reduce risk.”

In addition, analysts said that potential supply disruptions in the Middle East have not yet been incorporated into its forecasts. For example, the Democratic Republic of the Congo (DRC) relies on sulphur transported through the Strait of Hormuz for key production processes; the country accounts for about 15% of global copper mine output.

The analysts said that industry feedback shows that producers in the DRC hold up to three months of sulphuric acid inventories, meaning that near-term disruptions may have limited impact, but that long-term disruptions could tighten supply and erode the expected surplus.

Looking further ahead, Goldman Sachs keeps its long-term forecast unchanged, expecting copper prices to rise to $15,000 by 2035. The analysts believe that Middle East tensions may strengthen the electrification theme, and in its forecast for 2030, power grids and energy infrastructure account for 60% of global copper demand growth.

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