Author：Wall Street CN
Goldman Sachs lowered its copper price forecast in its latest report due to the impact of energy prices on global economic growth.
According to the trading platform, Goldman Sachs' base metals research report released on April 6th shows that...The company lowered its 2026 average copper price forecast to $12,650 per tonne and raised its global copper market surplus forecast from 380,000 tons to 490,000 tons, citing energy price shocks dragging down global economic growth and weakening the copper demand outlook.
This downward revision is primarily due to economists' baseline forecast that global real GDP growth will be dragged down by approximately 0.4 percentage points by energy price shocks. The forecast for global refined copper demand growth has been lowered from 2.0% year-on-year to 1.6%. With supply remaining unchanged, the global refined copper market surplus is expected to expand by 1.1 million tons to 490,000 tons by 2026.
Current copper prices remain well above their estimated fair value of approximately $11,100 for 2026, indicating a lack of fundamental support. This suggests that copper prices face further downside risks should the economic outlook deteriorate and investors reduce their risk exposure. However, we maintain our long-term forecast of $15,000 per tonne for copper by 2035, believing that electrification will continue to boost copper demand.
Downward revision of demand drives expansion of overcapacity
For every 1 percentage point slowdown in global real GDP growth, global copper demand growth will decline by approximately 0.9 percentage points. Based on economists' baseline scenario that an energy price shock would result in a 0.4 percentage point loss in global GDP growth, the refined copper demand growth forecast has been revised down from 2.0% to 1.6%.
The report points out that the decline in copper demand is smaller than that of aluminum because copper demand is becoming increasingly strategic and structural, and is relatively less sensitive to the global economic cycle.
Assuming supply forecasts remain unchanged, downward revisions to demand will directly increase the global refined copper surplus to 490,000 tons in 2026 from 380,000 tons. If this additional 110,000 tons of inventory accumulation occurs outside the US, then markets outside the US will be close to supply-demand balance this year. According to the rule of thumb, every 750,000 tons of change in supply-demand balance corresponds to a copper price fluctuation of approximately 1.40%. The 110,000-ton surplus increase is equivalent to about 1.5 days of consumption in markets outside the US, which will lower the expected year-on-year copper price increase from 29% to 27%.
Short-term price volatility has intensified, and downside risks are relatively high.
The report projects an average copper price of approximately US$12,700 per tonne in the second quarter, slightly higher than the implied price of US$12,333 in the futures market. This is primarily based on the baseline assumption that the situation in the Middle East is easing and speculative long positions are expected to rebound. The report also maintains its medium-term forecast that copper prices will gradually decline to a fair value of approximately US$12,000 in the second half of 2026.
The report shows that speculative net long positions in the copper market have shrunk significantly since the beginning of the year.If energy flows through the Strait of Hormuz begin to resume around mid-April, risk assets, including copper, will be supported.Furthermore, maintaining the baseline forecast that the Federal Reserve will cut interest rates by 25 basis points each in September and December is also beneficial to the performance of risk assets.
However, near-term risks are skewed to the downside. If the Strait of Hormuz disruption lasts longer than the baseline expectation, energy prices will remain high and further suppress global economic growth. Under the severe adverse scenario set by economists—where an energy price shock results in a 1.2 percentage point loss in global GDP growth—the global refined copper surplus will expand to approximately 670,000 tons, with its fair value estimated to fall to approximately US$10,900 in 2026.
The situation in the Middle East brings supply-side uncertainty
The situation in the Middle East poses a potential disruption to the copper supply side, but the relevant risks have not yet been incorporated into the baseline forecast.
The Democratic Republic of Congo (DRC) relies on sulfuric acid transported via the Strait of Hormuz for its copper production, used in the solvent extraction-electrowinning (SX-EW) process. DRC accounts for approximately 15% of global copper mine production, and the baseline forecast for its production growth this year is 5%, lower than the 13% year-on-year growth projected for 2025.
Industry feedback indicates that the DRC currently holds approximately three months' worth of sulfuric acid inventory. Therefore, under Goldman Sachs' baseline scenario, a one-month disruption in the Hormuz outbreak would have a limited impact on copper production. However, if the disruption is prolonged, copper production will be negatively impacted, potentially narrowing the refined copper surplus in 2026 and providing some support for prices.
The long-term electrification logic remains unchanged.
Despite pressure on the short-term outlook, Goldman Sachs maintains its long-term forecast that copper prices will rise to $15,000 per tonne by 2035, based on the core logic of limited supply growth coupled with continued expansion of demand in key sectors.
The evolving situation in the Middle East will further reinforce the electrification theme, as the increasing reliance on power grid systems for defense and energy security will drive copper demand growth. In its forecasts to 2030, power grids and energy infrastructure are expected to contribute 60% of the increase in global copper demand.
