The US-Iran war threatens the global economy! Goldman Sachs cuts its copper price forecast for 2026, expecting an increase in oversupply.

Ask AI · Why does Goldman Sachs remain optimistic about long-term copper prices despite oversupply?

Cailian Press, April 7 (Editor: Bian Chun) Goldman Sachs Group latest warns that, if the Strait of Hormuz remains blocked, copper prices could further decline.

An analyst led by Aurelia Waltham stated in a report: “We believe that, in the short term, copper price risks are clearly skewed to the downside. If the disruption of shipping through the Strait of Hormuz exceeds our baseline forecast, energy prices will stay high for a long time, thereby dragging down global economic growth.”

Currently, the metal market is closely watching U.S. President Trump’s “last warning” to Iran. According to CCTV News, Trump said that if Iran does not “surrender” by 8 p.m. Eastern Time on April 7, he will launch strikes on Iran’s civilian infrastructure.

Over the past month, most industrial metals have continued to be under pressure, as soaring oil and gas prices threaten global economic growth prospects and weaken demand for industrial commodities. Since the U.S. attack on Iran, copper prices have fallen about 7% in total.

Although Goldman Sachs’s baseline forecast suggests that the Strait of Hormuz could gradually reopen from mid-April, analysts point out that current copper prices are still well above the bank’s estimated fair value of about $11,100 per ton.

Despite tight supply outside the U.S. and the prospect of various countries strategically stockpiling copper providing some support to prices, Goldman Sachs warns that once the global economic “severely adverse” scenario it predicts occurs, these supporting factors will weaken.

“Current copper prices lack fundamental support. If economic prospects further deteriorate and investors start selling risk assets, copper prices could easily fall further,” Goldman Sachs said in the report.

Based on this, Goldman Sachs has lowered its average target price for copper in 2026 from the previous forecast of $12,850 per ton to $12,650.

The London Metal Exchange (LME) current trading price for copper is about $12,400 per ton. The average copper price so far this year is approximately $12,850 per ton.

Goldman Sachs currently expects a copper market surplus of 490k tons globally this year, higher than the previous estimate of 380k tons. The bank also revised down its global refined copper demand growth forecast from a previous year-on-year increase of 2.0% to 1.6%.

However, from a long-term perspective, Goldman Sachs maintains its optimistic outlook, expecting copper prices to rise to $15,000 per ounce by 2035. The bank’s analysts believe that tensions in the Middle East could strengthen the global electrification trend, thereby boosting global copper demand.

(Cailian Press, Bian Chun)