Goldman Sachs lowers 2026 copper price target, citing expanding surplus scale

Due to energy price shocks, Goldman Sachs has lowered its copper price outlook for global economic growth in its latest report.

According to the follow-the-wind trading desk, a basic metals research report published by Goldman Sachs on April 6 shows that it has lowered its forecast for the 2026 copper price average to $12,650 per ton, and raised its forecast for the global copper market surplus size from 0.38 million tons to 0.49 million tons, citing that energy price shocks have dragged down global economic growth, weakening the outlook for copper demand.

This cut is mainly based on its economists’ baseline forecast that global real GDP growth will be dragged down by about 0.4 percentage points due to energy price shocks. The forecast for the growth rate of global refined copper demand has been lowered from the previous year-on-year increase of 2.0% to 1.6%. With supply projections unchanged, the global refined copper market surplus for 2026 will expand accordingly by 1.10 million tons to 0.49 million tons.

Current copper prices are still far above its estimate of fair value for 2026 of about $11,100, implying that prices have not received fundamental support. If the economic outlook worsens and investors reduce risk exposure, copper prices face further downside risk. However, it maintains its long-term forecast that copper prices will rise to $15,000 per ton by 2035 and believes that the electrification trend will continue to boost copper demand.

Demand forecast downgrade drives surplus expansion

For every 1 percentage point that global real GDP growth slows, global copper demand growth will correspondingly fall by about 0.9 percentage points. Based on a baseline scenario in which economists estimate a loss of 0.4 percentage points in global GDP growth due to energy price shocks, the forecast for refined copper demand growth has been lowered from 2.0% to 1.6%.

The report notes that the magnitude of this copper demand downgrade is smaller than that for aluminum, because the strategic and structural characteristics of copper demand have become increasingly prominent, and its sensitivity to the global economic cycle is relatively lower.

Assuming supply forecasts remain unchanged, the demand downgrade directly drives the global refined copper surplus in 2026 to expand from 0.38 million tons to 0.49 million tons. If this additional increase of 0.11 million tons in inventories accumulates in markets outside the United States, then this year, markets outside the United States will be close to supply-demand balance. According to its rules of thumb, for every 0.75 million tons change in the supply-demand balance, copper prices fluctuate by about 1.40%. The surplus increase of 0.11 million tons is equivalent to about 1.5 days of consumption in markets outside the United States, which would lower the expected year-on-year rise in copper prices from 29% to 27%.

Short-term price volatility intensifies, downside risk is relatively high

The report expects the average copper price in the second quarter to be about $12,700 per ton, slightly above the futures market’s implied price of $12,333. This is mainly based on a baseline assumption that the situation in the Middle East is easing and that speculative long positions are likely to rebound, while also maintaining the medium-term view that copper prices will gradually fall in the second half of 2026 to a fair value of about $12,000.

The report shows that the speculative net long position in the copper market has been sharply reduced since the beginning of the year. If energy flows through the Strait of Hormuz begin to recover around mid-April, risk assets including copper will receive support; in addition, the maintained baseline forecast that the Federal Reserve will cut interest rates by 25 basis points in both September and December is also favorable for the performance of risk assets.

However, the risk bias is currently skewed to the downside. If the disruption in the Strait of Hormuz lasts longer than the baseline forecast, energy prices will remain elevated and further suppress global economic growth. Under the severe adverse scenario set by economists—namely, energy price shocks causing a loss of 1.2 percentage points in global GDP growth—the global refined copper surplus would expand to about 670k tons, and the estimated fair value for 2026 would fall to about $10,900.

The Middle East situation brings uncertainty on the supply side

The situation in the Middle East poses a potential disruption to copper supply, but the related risks have not yet been incorporated into the baseline forecast.

The copper production in the Democratic Republic of the Congo (DRC) depends on sulfuric acid transported via the Strait of Hormuz, used in the solvent extraction–electrowinning (SX-EW) process. The DRC accounts for about 15% of global copper mine production. Its baseline forecast for this year’s production growth is 5%, lower than the year-on-year growth rate of 13% in 2025.

Industry feedback shows that the DRC currently holds about three months of sulfuric acid inventory, so under Goldman Sachs’ baseline scenario, about one month of Hormuz disruption would have limited impact on copper production. But if the disruption lasts longer, copper production would suffer a negative shock. In that case, the global refined copper surplus in 2026 is expected to narrow, providing some support for prices.

Long-term electrification logic remains unchanged

Despite pressure on the short-term outlook, Goldman Sachs maintains its long-term forecast that copper prices will rise to $15,000 per ton by 2035. The core logic is that supply growth is constrained while demand keeps expanding in key areas.

The evolution of the Middle East situation will further strengthen the electrification theme, because the growing reliance of defense and energy security on power grid systems will drive copper demand growth. In its forecasts before 2030, power grid and energy infrastructure contribute 60% of the incremental global copper demand.

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