Goldman Sachs predicts copper drop

Forecasters at Goldman Sachs Group Inc. are predicting copper is heading from its early August 2016 value of about $4,800 per metric ton ($2.18 per pound) toward the $4,000 per metric ton range, or $1.81 per pound. That would signify a 17 percent drop in value for the red metal.

An online article prepared by Bloomberg says analysts from Goldman Sachs emailed a report predicting the slump will occur from mid-2016 to mid-2017 “as [copper] mine supply picks up, producers enjoy lower costs and demand growth softens.”

The analysts say there has been “solid growth in global mine supply” in the first half of 2016, which seems destined to bring additional supply in a market Goldman Sachs characterizes as experiencing “softening” demand growth.

The Bloomberg report and the Goldman Sachs analysts say additional mine supply is expected from Indonesia, Chile, Zambia and possibly Peru.

Copper prices that already have slid from peaks earlier this decade in the $4 per pound range have been cited by the scrap industry as a reason for lower supplies of copper and brass scrap.