Key Points

The sharp rise is mainly driven by two key factors: a tariff-driven reduction in copper stocks outside the United States, and positive sentiment around China's economic activity.

The report said, "We expect the copper price to rise to a peak for the year of USD 10,050 in August due to (1) the tariff-driven reduction in ex-US stocks".

Goldman Sachs has also upgraded its second-half 2025 forecast for London Metal Exchange (LME) copper prices to an average of USD 9,890 per tonne, up from the earlier projection of USD 9,140.

The firm expects prices to hit their yearly peak in August before easing slightly to USD 9,700 by December.

The anticipated decline toward the end of the year is based on Goldman's base case scenario, which assumes an 80 per cent probability that the US will impose a 25 per cent tariff on copper imports by September.

However, the report also noted that if the tariff implementation is delayed, copper prices could remain higher for a longer period.

The report highlighted the impact of the ongoing US Section 232 copper investigation, which has caused an unusually wide gap between copper prices on COMEX (US) and LME (UK).

This price difference has led to the US importing around 400,000 tonnes of copper so far in 2025, much more than usual. As a result, copper inventories in the US have climbed significantly, now covering over 100 days of consumption compared to just 33 days at the beginning of the year.

The report also reiterated its recommendation for the copper tariff trade strategy, going long on the December 2025 COMEX-LME copper arbitrage.

According to the report, the market is currently pricing in only a 14 per cent tariff, which underestimates the potential for a 25 per cent or even 50 per cent tariff being imposed.

Overall, copper markets remain sensitive to trade policy developments and global economic signals, especially from China, which continues to show resilience in its activity and demand.

- ANI