Copper Price Outlook 2026, 2027: Why Goldman Sees Much Higher Prices Ahead

Copper prices have pulled back this month, slipping alongside other industrial commodities. The metal traded near $6.06/lb Monday, down 8.9% from a month ago. That still leaves it almost 18% above the same week last year.

Goldman Sachs analysts see that as a buying opportunity. The bank's commodity team published a note Monday forecasting copper at $7.50/lb by end-2027, a roughly 24% gain from current levels. The call rests on a supply-side argument: new mine capacity is not coming fast enough to meet demand from power grids and electric-vehicle supply chains.

"The supply deficit is structural, not cyclical," Goldman analyst Adam Hill said. "We are seeing project delays across Chile, Peru, and the DRC. Even if every planned expansion hits its target, the market will remain undersupplied through at least 2028."

The bank projects a cumulative deficit of 500,000 to 750,000 tonnes over the next three years. That estimate assumes Chinese smelter utilization holds above 85% and global refined output grows at roughly 2.5% annually – well below the 4-5% pace that would balance the market, Hill said.

A counter-argument is that copper has overshot on hype before. In early 2023, prices briefly pushed above $5.80/lb on China-reopening optimism, then spent the rest of the year oscillating between $5.00 and $5.40. The current rally has stayed above $6.00 for four consecutive months, a run not seen since the post-Covid peak in mid-2022.

Traders at two New York metals desks said the open interest data supports the bull case. Total copper futures open interest across Comex and LME has grown 12% since January, with the bulk of new longs concentrated in front-month contracts through March 2026. That suggests conviction, not speculative churn, one floor trader said.

The thesis holds if LME cash-to-three-month backwardation widens further and Chinese smelter utilization stays above 85%. A reversal would weaken the case: if the spread flips back to contango or if Chinese grid spending slows below 10% year-on-year for two consecutive quarters.

Goldman's price path is not linear. The bank sees a retracement toward $5.80-6.00 this quarter. The macro headwind from a stronger dollar fades in early 2026, then a sustained grind higher, with physical premiums widening. Hill said the key signal to watch is not the outright price but the spread between LME cash and three-month futures, which has already moved to a small backwardation from a contango in July.

On the demand side, Chinese state grid spending through the third-quarter reached 450 billion yuan, up 12% year-on-year, according to data from the National Energy Administration. That pace is expected to continue through 2026 under Beijing's grid upgrade plan announced in March.

Copper supply from the world's top two producers, Chile and Peru, was flat through the first eight months of the year, according to national mining ministry data. Codelco, the state-owned Chilean giant, produced 4.3% less than a year ago, extending a multi-year decline from aging ore grades.

A potential swing factor is substitution. Higher copper prices have made aluminium a more attractive alternative in certain cable and transformer applications. The substitution effect is concentrated in low-voltage wiring, which accounts for only about 15% of total copper demand from the power sector, Hill said. "For most applications, you cannot swap without redesigning the system."

Goldman's base case is that the deficit keeps prices above $7.00 by late 2026 and pushes them toward $7.50 by end-2027. The bull case, assuming faster-than-expected Chinese grid buildout or a sharp mine disruption, targets $8.50. The bear case – a recession that cuts industrial demand by 5% – would still keep prices above $5.00, the bank said.

Hill declined to comment on when the next major price spike might come, saying only that the market's reaction to any supply disruption would be "larger than consensus expects."