'Green demand' to drive record tight copper balances, Goldman Sachs says

Strategists at Goldman Sachs reiterated their 'bullish' stance for a select group of global copper miners, predicting that so-called 'green demand' would drive the tightest balances ever over the next decade.

Their analysts' base case was that the transition towards clean energies would result in a nearly six-fold increase in copper demand to 5.4m tonnes by 2030.

Demand would be split between 1.5m tonnes from solar, 1.3m from wind, 2.4m from electric vehicles and 0.2m from EV charging points.

That was on top of the demand from the ongoing global coordinated economic recovery.

"In short, the annual average demand growth from these green technologies could be on par with that from China during a period of high growth in the 2000s," they said.

And to prevent the depletion of copper inventories, prices would need to rise.

Goldman's new price forecasts were $9,675/tonne in 2021, $11,875/t in 2022, and $12,000/t in 2023, before a material step up to $14,000/t in 2024 and $15,000/t in 2025.

As of 13:30 GMT, three-month LME copper futures were trading near $8,945 per metric tonne.

Hence, and despite a "stellar" year already for copper equities, Goldman saw the potential for a further re-rating.

In particular, they highlighted buy-rated Freeport-McMoran (Target price: $43.0), First Quantum Minerals (CAD$40.0), Lundin Mining (CAD$20.0), BHP (2,460.0p), Glencore (350.0p), and Anglo American (3,900.0p).