Copper prices could rise to as much as 66pc to $15,000/mt by 2025 according to a new Goldman Sachs report published on Apr 13.
The report titled “Copper is the new oil,” noted that the increased use of copper for renewable energy projects and in sustainability initiatives would boost prices for the red metal. In fact, the strengthening demand for copper coupled with its tight supply will lift the metal’s prices to around $11,000/mt over the next year.
Comparing copper to oil as a key commodity in the medium to long term, Goldman analysts observed that decarbonization initiatives would need large volumes of copper. By 2030, the report indicated, demand for copper is expected to increase by 900pc to around 8.7mn mt as the metal would be needed extensively to create infrastructure for clean energy amid robust adoption of green technologies. Moreover, if the adoption process were to slow down, the demand for copper would still rise by 600pc to 5.4mn mt over the next decade, the report noted.
Still, a limited supply of primary copper is creating a tight market. According to the Goldman report, output has lagged while copper prices have risen by around 80pc over the past year. The shortage of primary metal is likely to remain in the medium term as mine expansion and exploration of new copper projects takes time. As a result, Goldman has predicted a long-term supply gap of around 8.2mn mt by 2030.