Goldman Sachs maintains 2026 copper price, surplus forecasts

Goldman Sachs kept its 2025 copper forecast at $12,650/ton and its 2026 surplus estimate at 490,000 tons, but warned that Strait of Hormuz shipping disruptions plus China’s May 1 sulphuric acid export ban could tighten copper supply. The bank said DRC and Chile are most exposed, with potential 2026 production curtailments of about 125,000 tons in the DRC and 200,000 tons at risk in Chile, equal to roughly 1% of global supply. The article points to a supply-chain and geopolitical risk premium for copper, even as the broader balance remains surplus.

Analysis

The market is underpricing how quickly a sulfuric acid bottleneck can turn a seemingly comfortable copper surplus into a regional supply shock. The key second-order effect is that acid is not just an input cost; it is a throughput constraint for SX-EW operations, so a delay of weeks can force disproportionate tonnage losses even if mined copper ore is available. That makes this more relevant for names and jurisdictions with low inventory buffers and long logistics chains than for the global copper price alone.

The biggest near-term beneficiaries are not obvious copper producers, but sulfur, acid, and logistics substitutes that can arbitrage the constraint. If Chinese export restrictions persist, spot acid should reprice faster than copper cathodes, widening margins for producers with captive sulfuric acid capacity and penalizing Chile/DRC operators that rely on imported acid. This also creates a latent rally condition for copper equities only if the disruption extends into late Q2, because the first response is usually inventory drawdown, not immediate production cuts.

The contrarian view is that the headline supply risk may be more of a second-half 2026 earnings issue than a same-quarter copper price catalyst. Investors will likely front-run the geopolitical premium in copper futures, but the more durable trade is on names whose unit economics are directly levered to acid availability and shipping normalization. If the Strait of Hormuz risk de-escalates or China relaxes exports, the premium can unwind quickly, because the market currently has enough visible inventories to bridge a short interruption.

Goldman’s unchanged price deck suggests the base case still assumes demand softens enough to absorb disruptions, which leaves room for a mispricing in equities rather than the commodity. The cleaner trade is to separate duration: short vulnerable high-cost or acid-dependent producers against long suppliers of inputs and infrastructure that benefit from scarcity and freight rerouting. The key catalyst window is the next 4-8 weeks, when inventory cover in the DRC shifts from a buffer to a liability.

Key Decisions for Investors

• Long FCX / short a Chile- or DRC-heavy copper producer basket for 1-3 months: express the view that input-dependent output risk matters more than headline copper beta; target 1.5-2.0x on the pair if acid shortages force guidance cuts.
• Buy short-dated copper call spreads or futures only on a break above the prior reaction high: the first move is likely inventory digestion, so wait for confirmation; risk/reward improves if outages persist into late May.
• Overweight sulfur/sulfuric-acid supply-chain beneficiaries and freight/logistics names for 4-12 weeks: the trade is on bottleneck pricing and rerouting, not long-cycle copper demand; use a 15-20% stop if shipping normalizes.
• Avoid initiating fresh longs in DRC/Chile copper names until late May inventory data: two to three months of cover means production pain may not show up immediately, but once it does, downside can gap 10-15% on guidance revisions.