Goldman Sachs predicts surge in copper prices on tightening supply
Leading global investment banking and management firm Goldman Sachs is forecasting that copper is set for another price rise with the market impacted by potential supply shortages.
According to Goldman Sachs’ analysis, copper prices will benefit from constrained mine supply—particularly in Chile and Peru, two of the world’s largest copper-producing countries.
Supply constraints are tipped to exert upward pressure on copper prices, which Goldman forecasts will average US$4.55 per pound in the latter half of 2024 and further increase to US$4.80/lb in 2025.
Copper price strength
According to the Australian government’s June Resources and Energy Quarterly, copper prices rose by 14% since the start of the year.
The report forecasts that global copper consumption will grow by about 2.1% in 2024.
China and the US will account for the bulk of this growth, driven by rising manufacturing activity and large investments in energy infrastructure.
Australian copper export earnings are forecast to reach around $15.8 billion in 2024–25 and $17.0b in 2025–26 on the back of higher production growth and export volumes, combined with continued strength in prices.
Volume growth
Australia’s export volumes are forecast to grow by 14.5% to reach 905,000 tonnes in 2024–25.
The Australian copper sector will see mine production in 2024–25 grow to 800,000t, up 1% compared to 2023–24.
In 2025–26, production should reach 875,000 tonnes – an increase of 9.4% year-on-year.
Kanmantoo mine
The quarterly report noted that the projected growth will come from a range of new projects and expansions of existing operations over the outlook period.
This includes Hillgrove Resources’ (ASX: HGO) Kanmantoo copper mine project in South Australia, which started production in early 2024, with 122,000t of ore mined in the March quarter of that year.
Kanmantoo is expected to add around 43,500t of copper per year to Australian mine production.
The Hillside copper mine project in SA is expected to start operations in early 2026 with an annual production capacity of around 42,000t.
BHP consolidation
Elsewhere, BHP Group’s (ASX: BHP) acquisition of OZ Minerals in May 2023 saw the consolidation of Olympic Dam, Carrapateena and Prominent Hill as a new single-operated asset known as Copper South Australia (CSA).
The quarterly says the consolidation is expected to significantly increase refined copper output from CSA as ores from Carrapateena and Prominent Hill can be refined at the Olympic Dam site.
According to a BHP operational review, production from CSA increased by 49% and reached 233,000t in 2023-24.