Copper price to hit US$8000 this year, says Goldmans 9th...

Copper price to hit US$8000 this year, says Goldmans

9th February 2018
Resources Rising Stars
Accelerating global growth and a weakening US dollar have been cited as key reasons for global investment bank Goldman Sachs increasing its copper price forecast to US$8000 a tonne this year – up from US$7050 a tonne previously.
“Compared with three months ago, global growth is even stronger than we anticipated, supply is facing more challenges and the dollar has weakened substantially,” Goldmans said.
The investment bank notes that China is reducing copper scrap imports in an effort to clean up its environment, with the ban expected to boost copper prices by 5 per cent this year.
“In addition, the pipeline of labor contracts to be renegotiated in 2018 is even larger than in 2017, imposing downside risk to production,” it continues.
“On the macro front, both the current state of the global economy and investor positioning suggest further downside risk for the US Dollar.
“Although growth expectation have improved markedly, we think there is still room for growth to surprise on the upside,” it says.
Goldmans does caution that not all indicators are pointing to higher copper prices this year, with the physical market not tight yet and Chinese demand decelerating somewhat in recent months.
“However, such risks should not be exaggerated and we expect copper prices to move higher as these risks eventually recede.”