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Feb 27 (Reuters) - Goldman Sachs on Friday forecast copper prices would fall to $12,200 a metric ton by year-end from an average $13,000 so far this year as scarcity concerns ebb, though it said the decline would not be as deep as it previously projected.
The bank updated its prior forecast for a year-end price of $11,000 and said its fair value estimates for the metal, widely used in electrical wiring and electronics, were $11,300 for 2026 and $12,000 for 2027. MET/L
In a research note, Goldman Sachs said copper prices rose 41% in 2025 on speculative inflows. It said it expected the premium over its fair-value estimates to fall as scarcity concerns fade.
The bank projected a 2026 global copper surplus of 380,000 metric tons, up from its prior forecast of a 300,000 metric ton surplus, and said the global market would not enter a deficit until the end of the decade. Chile, Democratic Republic of Congo and Peru are among the metal's biggest producers.
The copper market outside the U.S. will stay in a deficit this year, estimated at 170,000 tons, smaller than the 450,000 deficit it previously forecast, the bank said. Its price forecast included a small premium for a limited probability of strategic stockpiling that would support prices above levels based on physical fundamentals.
"We see the risks to this deficit skewed to the downside, as ex-US inventory has increased so far this year, especially following a steel China stock build over the Lunar New Year holiday, and is currently within a normal range," Goldman added.
The bank said it no longer expects the United States to announce a refined copper tariff this year, as its economists have removed pending Section 232 tariffs from their baseline assumptions.
Benchmark three-month copper CMCU3 on the London Metal Exchange closed at around $13,343.50 per metric ton on Friday.
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Cynthia Osterman)
((anushree.ashishMukherjee@thomsonreuters.com;))
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