copper price has lost one of its most influential cheerleaders, after Goldman
Sachs chopped its near-term price forecasts in anticipation of a sharp slump in
consumer spending and industrial activity as Europe’s energy crisis deepens.
analysts have been among the most bullish voices on commodities, and warned
that copper in particular could become one of the tightest markets ever
seen. But with investors selling the metal in droves and prices now 40% below
the bank’s expectations, the bank is warning that the slump could still have
much further to run.
dollar’s surge has weighed significantly on copper and the global energy
squeeze that’s threatening growth is “heavily skewed toward escalation into
winter,” analysts including Nicholas Snowdon said in an emailed note.
bank sees copper at $6,700 a tonne in the coming three months, versus an
earlier forecast of $8,650.
of America also slashed its forecasts last week, warning that in a worst-case
scenario where Europe experiences widespread gas shortages, prices could plunge
to as low as $4,500 a tonne.
fell 3.15% Tuesday morning to $3.32 ($7,307) a tonne on the Comex market in New
York, the lowest since November 2020.
copper market is facing a surplus for the coming two years as demand wanes and
mines keep expanding, Marcus Garvey, head of commodities strategy at Macquarie
Group said at an online LME seminar on Tuesday. Absent more supply shocks, the
metal’s performance will come down to global growth, he said.
downward spiral in copper price that has gathered momentum in recent sessions
reflects increasingly pessimistic growth expectations,” Goldman said in its
latest leg lower has been tied to increasing headwinds to European growth path,
in particular from the impact of surging regional natural gas prices on
the bank said copper was on track to reach $15,000 in 2025, citing a “clear
structural bull story” as mine supply peaks.
sees copper at $7,600 in six months and at $9,000 in 12 months, versus previous
forecasts of $10,500 and $12,000.