Goldman Sachs: China’s Economic Slump Could Push Copper Prices Down to $5,000 Next Year

Goldman Sachs has revised its forecast for copper prices next year, citing weak demand due to China’s economic slowdown.

On Tuesday, Goldman Sachs adjusted its copper price estimate for 2025 from $15,000 per ton to $10,100 per ton, a reduction of about $5,000.

Copper prices had surged past $11,000 per ton in May this year, fueled by large capital inflows, marking an all-time high.

Jefferies’ Chief Strategy Officer of the Carlyle Group, Jeff Currie, also praised it as one of the best trades.

However, copper prices have since dropped by around 18%, and copper inventories have soared. China’s export growth has also slowed, and warnings about Chinese consumption are starting to emerge.

Goldman Sachs expects China’s annual economic growth rate to fall short of the target of 5% due to the prolonged downturn in the Chinese real estate market and headwinds in manufacturing and exports.

China’s copper demand has been declining since March, and the recent surge in copper inventories suggests that the country is moving away from the “inventory shortage” scenario that Goldman Sachs had previously anticipated.

Despite ending its long-standing bullish stance on copper, Goldman Sachs believes that the market is still headed toward a significant supply shortage, which may prompt the bank to reassess its position in the future.

Goldman Sachs stated, “Due to weaker-than-expected Chinese demand for raw materials and downside risks to China’s future economic outlook, we have adopted a more selective and less constructive tactical view on commodities.”

In addition to its revised copper forecast, Goldman Sachs lowered its aluminum price forecast for next year from $2,850 to $2,540 per ton. The bank maintains a bearish outlook on iron ore and nickel but recommends gold as a short-term hedge against geopolitical and financial risks.

Goldman Sachs identified gold as the commodity with the highest confidence for short-term gains, maintaining its early 2025 target price at $2,700 per ounce.