Goldman Sachs significantly raised its long-term copper price forecasts and believes aluminum prices are too high in the short term.

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Goldman Sachs has expressed a strongly bullish stance on the copper market in its latest research report, while warning that aluminum prices are overvalued in the short term.

According to Zhui Feng Trading Desk, Goldman Sachs recently re-evaluated the long-term prospects for copper and aluminum in its report. Goldman raised its long-term copper price forecast for 2035 to $15,000/ton, significantly higher than the market consensus of $10,900/ton.

Goldman's brand new "long-term copper incentive curve" pricing model shows that copper prices will be capped below $11,000/ton in 2026-2027 (due to the market currently being in slight surplus), but expects a supply gap to emerge in the latter part of this decade due to resource constraints and growing demand in key sectors.

Meanwhile, Goldman Sachs maintains its bearish view on aluminum prices, expecting aluminum prices to fall to $2,350/ton in Q4 2026, and believes that prices will not return to current levels until the early part of the next decade. Goldman expects new supply to push the market into surplus. Although aluminum demand will benefit from similar drivers as copper and from substitution effects, aluminum will not face the resource constraints copper experiences.

Copper: Resource Constraints to Drive Sharp Price Increases After 2028

Goldman's innovative pricing model points to higher copper prices, introducing a brand new "long-term copper incentive curve" pricing model this time, which breaks through the limitations of traditional project incentive curves. The new model comprehensively takes into account scrap recycling, substitution effects, mine life extension, as well as adjustments for stagnant and emerging projects, and estimates a supply gap will emerge in the latter part of this decade due to resource constraints and rising demand in key sectors.

Goldman has slightly raised its 2026 copper price outlook to $10,500/ton, slightly below market consensus, mainly reflecting expectations of a short-term market surplus. But what’s more noteworthy is the long-term forecast: The 2035 copper price target is $15,000/ton (which is $11,500/ton or $5.20/lb in 2025 dollars), well above market consensus and long-dated futures prices. Goldman also raised its 2029 and 2030 copper price forecasts to $12,000/ton and $12,250/ton.

Goldman's analysis points to three core reasons behind the forming copper supply gap:

First, in the short term, mine output declines more slowly than expected, but long-term operating costs increase significantly. Data shows that 2024 mine output exceeded 2014 forecasts, mainly due to extended mine life. Although output has been maintained, copper ore grades at these mines have fallen by 25%, meaning that 33% more ore must be mined to produce the same amount of copper, resulting in significantly higher operating costs.

Second, Congo's recent output growth exceeded expectations but faces constraints. The country owns 8% of the world's copper reserves but currently accounts for 14% of global output. Over the past decade, Chinese investment has driven substantial output growth. While Goldman has factored in an additional 500,000 tons of Congolese output, this assumption is subject to three major constraints: the US is seeking to counterbalance China’s influence in Congo, the country’s mining exploration expenditure is low, and Africa only accounts for about 5% of the world’s undiscovered copper resources—implying that the current 14% output share is hard to sustain long term.

Third, refined copper demand is below expectations mainly due to stronger aluminum substitution effects. Goldman estimates that without substitution and savings effects, 2024 copper consumption would be 13% or 4 million tons higher. Research shows that for every $1,000/ton increase in the copper-aluminum price gap, net substitution rises by roughly 0.1%, equivalent to a 175,000-ton reduction in refined copper demand by 2035.

Additionally, Goldman's comprehensive scrap supply model shows that after deducting copper losses flowing into the steel and aluminum value chains, post-consumer recycling rates have been limited to about 75% over the past decade. Goldman's core assumption is an upper recycling rate limit of about 75%, but estimates that for every 10% rise in copper price, the recycling rate will increase by 0.8%. However, this relationship will show diminishing returns as recycling approaches 80%. Goldman's 2030 forecast for post-consumer scrap recycling rate is 74% (copper price $12,250/ton); under the long-term methodology, prices would need to rise 12.5% to raise recycling by 2%, equivalent to an annual scrap supply increase of 350,000 tons.

Aluminum: Current Prices Too High, Supply Growth to Drive Pullback

Goldman maintains a 12-month bearish view on the aluminum market, expecting that as new supply pushes the market into surplus, aluminum prices will drop to $2,350/ton in Q4 2026. Although prices are expected to rebound thereafter, they are not expected to return to current levels until the next decade. Although aluminum demand will benefit from similar drivers to copper and from substitution effects, it will not face the resource constraints seen in copper.

Goldman has extended its long-term price forecasts for aluminum, expecting prices to trade in the $2,900–3,400/ton range during 2030–2035 (about $2,600/ton in 2025 dollars).

Goldman believes that unlike copper’s global resource constraints, aluminum faces regional power constraints rather than inflationary ones:

Power costs account for about 35% of aluminum operating costs, while bauxite remains abundant and cheap. While Goldman expects European electricity prices to fall as LNG supply rises, aluminum producers in Europe and North America are finding it increasingly difficult to secure long-term (multi-decade) power contracts at low prices (<$50/MWh), eroding part of the first-quartile producers' cost advantage.

Growth in new aluminum supply over the next decade may rely on cheap coal-fired power ($40–60/MWh), putting these new capacities in the second quartile of the global cost curve, with capital expenditure higher than China but far below developed markets. Prices of about $2,500/ton (in 2025 dollars) from 2026–2030 will be enough to incentivize new capacity in India and Indonesia, then will need to rise to about $2,600/ton (2025 dollars) in 2030–2035 to incentivize the next frontier regions. This will see the copper-to-aluminum price ratio rise from an average of 3.8:1 in 2025 to 4.4:1 in 2035.

On other supply aspects, Goldman expects global output to grow by about 13 million tons from 2025 to 2035. Goldman believes Central Asia, Iran, and Sub-Saharan Africa will become the next major growth centers for aluminum production. Among these, China’s East Hope Group is advancing a $12 billion aluminum industry chain plan in Kazakhstan, and Yunnan Construction and Investment Group is investigating investment opportunities in Tajikistan.

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