Goldman Sachs: Non-U.S. "copper shortage" intensifies; if U.S. tariffs are implemented, LME copper will surge to $14,000 in the second half of the year.

Goldman Sachs has significantly raised its copper price forecast, increasing the average LME copper price estimate for 2027 by 28% to $13,800/ton. The core logic lies in the sudden expansion of supply gaps in markets "outside the US"—continued US imports and stockpiling have been draining global available supply. Coupled with the supply shock from delayed recovery at two major copper mines until 2028, this has pushed non-US copper markets into deep shortages, providing strong support for higher LME copper prices.

In its June 4 report, Goldman Sachs raised its Q4 2026 average LME copper price forecast from $11,200/ton to $13,700/ton, up 22%; and its full-year 2027 forecast from $10,750/ton to $13,800/ton, up 28%. The current LME spot price is around $13,714/ton.

Goldman Sachs believes the most crucial recent price catalyst is the direction of US copper tariff policy, with relevant decisions expected this month. If the US announces an increase in copper tariffs starting January 2027, it will drive importers to accelerate stockpiling, further tightening supply in markets outside the US, and LME copper prices may break through $14,000/ton in the second half of 2026. If there is a clear announcement of no tariff increase, import demand will drop sharply, and copper prices may fall to around $12,800/ton—Goldman Sachs believes this is close to the fundamental fair value of copper.

Goldman Sachs's report substantially revised the non-US copper market supply gap forecast for 2026 to about 640,000 tons, and about 170,000 tons for 2027, both significantly larger than previous estimates. The report points out that LME copper prices are essentially formed in the non-US market, and continued tightening in this region will drive LME copper pricing higher.

Non-US Copper Market Gap Expands Suddenly, Dual Tightening in Supply and Demand

This round of non-US copper market gap expansion is driven by simultaneous tightening on both supply and demand sides.

On the supply side, global mine output in 2026 and 2027 will decrease by about 350,000 tons, accounting for roughly 1.5% of total global mine supply. On the demand side, to avoid potential tariffs, the US is expected to heavily import copper, with US copper inventory rising from about 0.1 million tons at the start of 2025 to about 1.8 million tons by the end of 2026, an annual accumulation of about 900,000 tons, up from the previous forecast of 550,000 tons.

Copper that enters US warehouses no longer flows to LME or other international markets, directly compressing the available global supply. This results in a 2026 supply gap of about 640,000 tons and 170,000 tons in 2027 for non-US markets, both meaningfully wider than previous estimates, thus supporting an overall upward shift in copper price benchmarks.

Delayed Recovery at Two Major Mines, Scrap Copper Substitution Blocked

This round of copper mine supply reduction mainly comes from delayed recovery at two global-class mines.

The Grasberg mine in Indonesia and the Kamoa-Kakula mine in Congo (DRC) both suffered production accidents in 2025, leading to reduced output. Goldman Sachs's latest assessment believes both mines will not fully recover to normal capacity until 2028. This revision directly caused Goldman to lower its forecast for global mine supply in 2026 by about 350,000 tons.

In theory, scrap copper can substitute for refined copper shortages, but this channel is also currently blocked. Due to weak supply of scrap copper within China, scrap copper cannot effectively fill the gap in refined copper supply, making the overall copper market even tighter, with little buffer.

Tariff Policy Is the Key Recent Catalyst, Three Scenarios Correspond to Different Price Paths

Goldman Sachs believes US copper tariff policy is the most crucial recent variable affecting LME copper prices, with three main scenarios and different price paths.

If tariff news remains undecided, copper prices are likely to hold near current levels, with the tight non-US market and capital positions jointly providing a floor.

If the US announces an official copper tariff hike starting January 2027, importers will substantially step up stockpiling in the second half of 2026, further tightening non-US market supply, and LME copper prices may break through $14,000/ton in H2 2026. However, once tariffs are implemented, import activity is expected to cool sharply in 2027, and prices will likely come under pressure and fall.

If the US clearly announces no tariff increase, import demand will drop sharply, and the non-US market may turn to a slight surplus in 2027, with copper prices expected to fall to about $12,800/ton—Goldman Sachs also sees this as the fundamental fair value in the no-tariff scenario. Goldman also points out that even if tariffs are not imposed now, the tariff option does not disappear entirely as a possibility.

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The above highlights are from Chasing Wind Trading Desk.

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