Goldman Sachs on #copper: The relationship between inventories...

Goldman Sachs on #copper: The relationship between inventories and timespreads—spot prices versus forward prices—is highly non-linear for industrial metals, including #copper. The boost to timespreads from a drop in industrial metal stocks tends to be modest when stocks are within historical norms, but rises sharply when dropping to depletion level lows. Our metals team expects that large deficits from Q2 will push the #copper market into the steep scarcity pricing part of the stocks-timespreads curve and backwardation in H2. The estimate that current #copper 1/12 month timespreads look about 2 standard deviations (~$650/ton) too low vs. fair value and the non-linear #coppercurve support our bullish copper call that the #copper price will jump 65% by 2025.