Goldman Sachs raises copper price target! U.S. "stockpiling wave" intensifies global supply shortage

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The United States imported large quantities of copper ahead of the tariff deadline, pushing global copper market tensions to a new level.

According to Chase Trading Desk, on June 1, Goldman Sachs’ commodities research team released its latest copper market outlook. Analyst Aurelia Waltham raised the LME copper year-end 2026 target price from $12,465 to $13,735/ton, and the 2027 average price forecast from $12,150 to $13,800/ton.

The core logic is: The United States continues to import large quantities of copper, draining "outside America" markets of available supply, while the recovery at two major mines is much slower than expected. The combination of these forces is pushing the copper market into a deeper shortage than previously anticipated.

Copper prices are currently about $13,600/ton, up about 10% this year, lower than the historical high of $14,153 set in mid-May but still at elevated levels. Analysts estimate that the supply gap in the "outside America" market will reach 640,000 tons in 2026 and 170,000 tons in 2027, while previous estimates were just 60,000 and 40,000 tons respectively.

America is "stockpiling"; markets outside America lack even more copper

Analysts raised the forecast for U.S. copper inventory accumulation in 2026 from 550,000 tons to 900,000 tons.

The logic is straightforward: the market fears the U.S. may impose a copper tariff, so importers rush to stock up before the policy takes effect. Once this copper enters U.S. warehouses, it's "locked in" and no longer flows to the LME or other international markets; thus, London copper prices reflect prices based on further compressed global surplus supply.

The baseline scenario is no formal U.S. copper tariff announcement within 2026, but import momentum is still expected to continue, because the mere expectation that "tariffs could come at any time" is enough to drive ongoing stockpiling.

Price data models show that for each day’s tightening in copper market supply (about 75,000 tons), copper prices increase about 1.4%. Based on this, the supply gaps in 2026/2027 for "outside America" support copper prices at roughly $12,120/$13,300. Adding the possibility of strategic stockpiling by the U.S. and others, this contributes about $500/ton in additional price support, resulting in a 2026 fair value of about $12,600 and 2027 about $13,800.

Currently copper price at $13,600 is higher than the fair value for 2026; analysts believe this premium comes from speculative capital inflows—under a hard asset rotation, strategic demand from energy security, AI infrastructure, and defense give copper stronger narrative support, with no clear trigger for speculative longs to unwind in the short term.

Two mines drag down supply, scrap copper can’t fill the gap

This year’s main supply issue lies in two world-class mines: Grasberg in Indonesia and Kamoa-Kakula in the DRC.

Both mines have yet to return to full production after accidents in 2025, with the latest forecast being a return to normal levels only by 2028. Because of this, analysts lowered their 2026 global mine supply forecast by 350,000 tons, about 1.5% of total world mine supply.

Scrap copper was expected to be a buffer, but this avenue is also blocked this year. China’s domestic scrap copper output fell 12% year-on-year in the first few months of this year.

Three scenarios: price ranges from $12,600 to over $14,000

Scenario One: Strait of Hormuz blockade lasts longer than expected

Baseline scenario assumes the Strait of Hormuz will reopen by the end of June. If the blockade persists, demand will be hit by slower global economic growth; in a severe negative scenario, global economic growth is hit by 1.1 percentage points, copper demand in 2026 drops about 300,000 tons compared to February forecast. Supply will also be affected; tightness in the sulfur and sulfuric acid markets may impact mine production, with about 125,000 tons in the DRC and 200,000 tons in Chile at risk.

The impact on both supply and demand roughly offsets each other, keeping fair value essentially unchanged, but if global risk appetite falls sharply and speculative funds exit, copper prices may drop towards the $12,600 support level.

Scenario Two: U.S. announces copper tariffs effective January 2027

If tariffs are announced in June and implemented in January, this will drive U.S. imports to accelerate sharply in the second half of 2026, and LME copper prices may break above $14,000. But once the tariff is in place, imports will stop abruptly, and 2027 prices will come under pressure, expected to fall to around $13,900.

Scenario Three: U.S. explicitly announces no copper tariffs

Imports will drop sharply; the "outside America" market in 2027 will shift to a small surplus of 130,000 tons, with copper price expected to fall to around $12,800, which is also the fair value estimate for 2027 under this scenario. Analysts specifically note, however, that even if tariffs are not imposed now, the option won’t completely disappear. Referencing previous statements on key minerals tariffs, "If a satisfactory agreement is not reached, tariffs may be imposed in the future."

Demand: Power grid and AI hold up copper's floor

It is noteworthy that the demand structure for copper is changing, making it less sensitive to economic downturns.

China’s apparent copper demand grew 1% year-on-year in Q1 this year, maintaining positive growth even as copper prices approached record highs—behind this is a 10% year-on-year increase in demand for power grid and electricity infrastructure, partially offsetting weakness in photovoltaics and electric vehicle demand.

Calculations show that by 2030, increased copper demand from power grid and electricity infrastructure will exceed 60% of total demand growth. This type of demand is driven by energy security, expansion of AI data centers, and defense projects—much less sensitive to economic cycles than traditional copper uses like construction or appliances, and more tolerant of high copper prices.

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The above highlights are from Chase Trading Desk.

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