Be wary of the tariff war and declining demand! Goldman Sachs lowers its copper price target to $8,500.

On November 13, Goldman Sachs released its latest research report, analyzing the current situation and future trends of the copper market, especially the fluctuation of copper prices under the uncertainty of US trade tariffs and Asian economic policies. The key points summarized by Wall Street News are as follows: The report points out that based on the current market situation, analysts have lowered the target price of copper for 0-3 months from $9,500 per ton to $8,500, and lowered the average price for the fourth quarter of 2024 from $9,500 to $9,000. The main reason for the price adjustment is due to concerns about increased copper demand as a result of potential trade tariffs by the US and weaker-than-expected stimulus policies in Asia. Despite strong year-over-year growth in global copper consumption in September, investors' net positions in copper and other base metals are overvalued, and may be further reduced before the end of the year. The re-election of former US president Trump is seen as a clear turning point in global trade tariff policies, and the lack of large-scale economic stimulus measures in Asia so far has surprised the market. The report emphasizes that Trump's re-election may lead to increased tariffs on Asia, increasing the risk to the baseline forecasts for bullish copper and aluminum markets in the medium term. While the baseline forecasts suggest that copper prices may reach $11,000 per ton and aluminum prices may reach $2,900 per ton by the second half of 2025, a global economic recovery could be delayed if impacted by higher US tariffs and weak stimulus measures in Asia. The global copper end-use tracker for September showed that China's copper consumption increased by about 6% year-on-year, mainly driven by the growth in demand for electric vehicles, renewable energy, and consumer goods. China's fiscal stimulus measures and export demand supported strong domestic copper consumption. However, contraction in manufacturing activity in developed markets has resulted in copper consumption outside of China remaining relatively stable. The report also analyzed the growth in electric vehicle sales, particularly in China. Approximately 1.7 million electric vehicles were sold globally in September, with China accounting for 1.2 million. The growth of electric vehicles partially offset the weakness in traditional fuel vehicle sales, as each electric vehicle uses more copper than traditional vehicles. Lastly, the report points out that China continues to increase its capacity for renewable energy generation, driving growth in copper consumption related to decarbonization. In September, China added approximately 21 gigawatts of CECEP Solar Energy and 5.5 gigawatts of wind energy generation capacity, implying around 80,000 tons of copper consumption. This article is reprinted from "Wall Street News", written by Pan Lingfei; GMTEight editor: Yan Wencai.