After hitting a new high of 11,000, Goldman Sachs issued a warning about copper prices: a surplus of 500,000 tons this year, with possible range-bound fluctuations next year.
Goldman Sachs has issued a warning about copper prices soaring above $11,000 per ton, believing that this rally is unsustainable because global copper supply is still sufficient to meet demand, and expects copper prices to fluctuate between $10,000 and $11,000 in 2026.
According to Chasing Wind Trading Desk, in its latest research report, the analyst team led by Aurelia Waltham at Goldman Sachs wrote that the recent increase in copper prices is mainly based on expectations of future market shortages, rather than current fundamentals. The bank expects copper supply to exceed demand by about 500,000 tons this year, with a copper shortage not appearing until 2029.
Goldman has raised its forecast for average LME copper prices in the first half of 2026 to $10,710, reflecting the impact of potential U.S. tariffs driving copper inflows, but expects a slight correction in the second half. Furthermore, the "extremely low" inventory issue outside the U.S. can be alleviated by higher regional premiums and tighter LME spreads.
On Wednesday, LME copper prices hit a record high of $11,540 per ton, mainly due to market concerns that a surge of metals into the U.S. ahead of tariffs could tighten global supply. On Thursday, Asia-Pacific mining stocks followed higher, with A-shares of China Molybdenum rising as much as 6% and Capstone Copper’s Australian shares up as much as 8.2%.
Copper is still regarded by Goldman Sachs as the “top pick” among industrial metals, supported by investment in global power grids and energy infrastructure. Although long-term supply and demand are set to tighten, the short-term market remains slightly oversupplied.
Limited Support from Supply and Demand Fundamentals
This year, copper prices have been lifted by expectations of Fed rate cuts, a weaker dollar, and hopes for a recovery in the Chinese economy, combined with supply disruptions and policy changes (such as U.S. tariffs and a capital expenditure boom in AI), attracting a large inflow of speculative funds. Copper's net speculative long positions are near historic highs.
According to Goldman Sachs, the recent copper price surge is primarily driven by expectations of future supply tightness, not current demand or inventory changes. Last week, trading firm Mercuria Energy Group warned of a possible “extreme” supply mismatch, further fueling market sentiment. This warning intensified fears of metal rushing to the U.S. before tariffs are imposed.
Goldman expects a surplus of 500,000 tons in the global copper market in 2025, mainly due to weak demand in some Asian countries in Q4, but the surplus will narrow to 160,000 tons in 2026 and the market will gradually balance—still insufficient to constitute a real shortage.
Goldman points out that in the first half of 2026, copper prices will get extra support from the U.S. market. As the U.S. may announce at least a 25% import tariff on refined copper around mid-2026, traders have already locked in high-premium annual contracts, accelerating copper inflows into the U.S. and tightening supplies elsewhere.
The recent rise in LME copper prices has been driven by inventory cancellations, signaling metal flowing to the U.S. Goldman has thus raised its average LME copper price forecast for H1-2026 to $10,710, but predicts a slight correction following the implementation of tariffs in the second half.
Notably, although the market is generally concerned about "extremely low" inventories outside the U.S., Goldman believes this issue has been exaggerated.
The bank’s analysts state that regional inventory tightness can be eased through market mechanisms, including higher regional premiums and tightening LME spread structures. These adjustments will help rebalance global copper supply distribution.
Copper Remains the Top Pick
Although supply is abundant in the short term, global investments in electrical grids and energy infrastructure—especially in strategic areas like AI and defense—will be enough to support sustained growth in copper demand over the long term.
Therefore, Goldman maintains its “top pick” rating on copper and suggests investors go long on the December 2027 LME copper contract. It is expected that copper prices will fluctuate between $10,000 and $11,000 in 2026, with $10,000 forming a solid price floor, reflecting resource constraints and structural demand growth.
In the short run, copper prices may see a staged rise driven by U.S. tariff expectations and inventory flows, but will be hard to sustain once they break out of the range. In the long run, the supply-demand gap will gradually emerge after 2029, when copper prices are expected to rise further, with Goldman forecasting the LME copper price to reach $15,000/ton by 2035 (equivalent to $11,500/ton in 2025 dollars).
On Thursday, LME copper prices extended their rally, up 31% so far this year. Aluminum prices also continued to strengthen, on track for the highest close since 2022.
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