Goldman Says Copper’s ‘Breakout’ Above $11,000 Won’t Last

(Bloomberg) — Goldman Sachs Group Inc. injected some caution into the debate over copper’s prospects, saying its surge past $11,000 a ton will prove short-lived as there’s still more than enough metal to meet global demand.

“Most of the recent copper price increase is based on expectation of future market tightness, rather than current fundamentals,” the bank’s analysts, including Aurelia Waltham, wrote in a note. “We do not expect the current breakout above $11,000 to be sustained.”

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Copper marched to a record of $11,540 a ton on the London Metal Exchange on Wednesday, fueled by worries of a global supply squeeze as the metal is rushed to the US before tariffs are imposed. Trading house Mercuria Energy Group Ltd. stoked that trade last week with a warning of “extreme” supply dislocations.

While Goldman raised its forecast for copper in the first half of next year and said the US tariff trade would support prices, the bank suggested “critically low” inventories outside America could be avoided via higher regional premiums and tighter LME spreads. Demand will fall about half a million tons short of supply this year, and there won’t be a copper shortage until 2029, it said.

“While our much smaller 2026 surplus of 160,000 tons moves the market closer to balanced, it means that we do not expect the global copper market to enter a shortage any time soon,” the analysts wrote. Prices will be “constricted” in a range between $10,000 and $11,000 a ton in 2026, they said.

Copper fell 0.3% to settle at $11,450 a metric ton on the LME Thursday, trimming its gain for this year to nearly 31%.

“The rally has just started. We remain bullish on copper prices,” said Li Xuezhi, head of research at Chaos Ternary Futures, a unit of a commodities hedge fund in Shanghai. A huge withdrawal of metal from LME warehouses on Wednesday “fueled immediate worries about a supply squeeze,” he said.

Still, copper has long been the subject of bold forecasts that have fallen short of reality. And while a series of outages at major mines through 2026 has piled pressure on supply, the world’s appetite for copper also has slowed more recently despite obvious bright spots like green technologies.

Activity in copper’s pivotal China market in particular has plunged in recent months. Goldman said it’s expecting a slump in Chinese consumption of nearly 8% year-on-year in the fourth quarter. Next year should see growth of 2.8%, it said.