Beware of tariff wars and declining demand! Goldman Sachs lowers copper price target to $8,500

On November 13th, Goldman Sachs released the latest research report analyzing the current state and future trends of the copper market, particularly the price fluctuations of copper under the influence of uncertainties related to U.S. trade tariffs and Asian economic policies.

Wall Street Insights has summarized the key points as follows:

• The report indicates that based on the current market situation, analysts have lowered the target price for copper for the next 0-3 months from USD 9,500 per ton to USD 8,500 per ton, and have reduced the average price for the fourth quarter of 2024 from USD 9,500 to USD 9,000. The main reason for the price reduction is the potential increase in U.S. trade tariffs and the weaker-than-expected Asian stimulus policies, which have raised concerns about copper demand.
• Although global copper consumption showed strong year-on-year growth in September, investors' net positions in copper and other base metals are overly high and may be further reduced before the end of the year. The re-election of former U.S. President Trump is seen as a significant turning point for global trade tariff policies, while the lack of large-scale economic stimulus measures in Asia has surprised the market.
• The report emphasizes that Trump's election could lead to increased tariffs on Asia, raising the risks to the baseline bullish forecast for the mid-term copper and aluminum markets. Although the baseline forecast suggests that copper prices could reach USD 11,000 per ton and aluminum prices could reach USD 2,900 per ton by the second half of 2025, this recovery may be delayed if the global economy is impacted by increased U.S. tariffs and weak Asian stimulus measures.
• The global copper end-use tracker for September shows that China's copper consumption grew by approximately 6% year-on-year, mainly driven by demand from electric vehicles, renewable energy, and consumer goods. China's fiscal stimulus measures and export demand supported strong domestic copper consumption. However, manufacturing activity in developed markets contracted, leading to flat copper consumption outside of China.
• The report also analyzes the growth in electric vehicle sales, particularly in China. In September, approximately 1.7 million electric vehicles were sold globally, with China accounting for 1.2 million of those sales. The growth in electric vehicles partially offset the weakness in traditional fuel vehicle sales, as each electric vehicle uses more copper than traditional cars.
• Finally, the report notes that China continues to increase its renewable energy generation capacity, which also drives growth in copper consumption related to decarbonization. In September, China added approximately 21 gigawatts of solar and 5.5 gigawatts of wind power generation capacity, translating to about 80,000 tons of copper consumption