Copper Price Forecast, October 2016: Downward Pressure on the Horizon?

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Set of copper pipes of different diameter lying in one heap

Set of copper pipes of different diameter lying in one heap

Copper prices could soon see significant pressure due to what many are calling ‘a wall of supply.”

A recent report from CNBC, citing commodity analysts at Goldman Sachs Group, reveals a supply glut could translate to reduced copper prices for the foreseeable future. In fact, the weakness of copper (in addition to the strength of zinc) has been one of Goldman Sachs’ focal points this year.

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“Over the next three to six months we believe that copper will continue to underperform zinc, with copper about to hit a wall of supply, while the zinc concentrate market continues to tighten,” Jeffrey Currie of Goldman Sachs and his team of analysts said in a note.

This week, three-month copper on the London Metal Exchange slipped following weak export data from China. The metal recently reached a two-month high as recently as the end of September, the news source stated.

“In copper, we expect the main catalyst for the downside will be accelerating oversupply, but we are also conscious that we are entering a weak seasonal period for demand during which period inventories tend to build and prices often come under pressure,” the team added. “In zinc, the catalyst for further upside is that we expect a further substantial tightening of the concentrate market over the winter, which should result in zinc smelter production curtailments in China.”

Q4 Copper Price Forecast

How will copper and base metals fare for the remainder of 2016 and into 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

 

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