Goldman Sachs said that this year's copper market will be in the tightest state since 2021. It is expected that there will be a gap of 428,000 tons, while the current visible inventory is only 260,000 tons.
The Zhitong Finance App learned that Goldman Sachs said that if demand for electric vehicles, green energy and infrastructure from China continues to be strong, the copper market will face an irreversible shortage of supply by 2030.
Goldman Sachs pointed out that it will take at least seven years to increase global copper production, and some of the projects that will be put into operation this year or next two are the last steps before the copper supply pipeline begins to dry up. Goldman Sachs said this is a well-known topic, but many bulls are waiting for copper prices to reflect higher incentive prices or will act during the 2026 period when supply is tight.
However, due to the closure of the Panamanian copper mine Cobre Panama and the decline in Chilean copper grades, the market became strained prematurely. Goldman Sachs said that this year's copper market will be in the tightest state since 2021. It is expected that there will be a gap of 428,000 tons, while the current visible inventory is only 260,000 tons. Goldman Sachs also added that there has been no significant increase in inventory so far this year. Goldman Sachs said it will continue to set a target price of 10,000 US dollars/ton for copper over the next 12 months. As of press release, LME copper reported $8,423 per ton.
In addition, Canadian mining tycoon Robert Friedland, chairman of Ivanhoe Mines Co., Ltd., expects copper prices to rise to 9,500 US dollars/ton and then drop to 7,500 US dollars/ton this year. Robert Friedland said that this decline will be short-lived, and demand for copper will increase as the Federal Reserve considers cutting interest rates and the economies of some Asian countries speed up. He added that a series of major setbacks in key mining operations are also expected to lead to a tightening of the copper market over the next year, thereby eliminating the large surplus that analysts had previously expected to continue until 2024. He pointed out that the copper spot market is very, very tight. Copper prices in dollars are likely to rise sharply due to the possibility that the Federal Reserve will cut interest rates.