Goldman Sachs has raised its 12-month copper price forecast to US$7,050 per metric tonne from its previous 5,500, with China expected to drive half of the global consumption growth over the next five years.
It also said that electric vehicle development is becoming an increasingly important market for the metal.
“We expect China copper demand to increase 3.1 percent in 2017 and 1.8 percent per year on average from 2017 to 2022,” said Goldman analysts Hui Shan, Jefferey Currie, Mikhail Sprogis, and Yubin Fu, in a research report on Tuesday.
China’s growth is expected to slow because of a shift away from an unbalanced economy where the property market played an overly dominant role. But it will still account for half of global copper demand increases over the next five years, they added.
Overall, Goldman projects world copper demand to rise 2.5 percent in 2017 and 1.8 percent per year on average from 2017 to 2022.
That demand growth, combined with a weaker US dollar, will translate into around a 10 percent increase in copper prices from 2017 to 2018, they said.
The analysts raised their three-month, six-month, and 12-month forecasts to US$6,750, US$6,900, and US$7,050 per tonne, respectively, higher than the previous US$6,200, US$5,600, and US$5,500.
Source: South Morning Post
