Goldman says copper bull run ‘fully underway,’ sees potential for record high – CNBC

The smelter is melting copper on July 23, 2020 in Jinhua, Zhejiang, China.

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LONDON — Analysts at Goldman Sachs believe copper prices could soon test their existing record highs, saying the bull run for the industrial metal is now “fully underway.”

Copper prices on Tuesday rose to their highest level since March 2013, touching $7,719 per metric ton following stronger-than-anticipated manufacturing activity in China and South Korea.

The metal has since pared gains, with three-month copper futures on the London Metal Exchange last seen trading at $7,626 per metric ton.

Copper, which is used in everything from power to construction, has risen more than 22% this year, on pace for its best year since 2017. Prices have been boosted by supply disruptions, hopes for “green” economic stimulus and China’s swift recovery from the coronavirus crisis.

“The bull market for copper is now fully underway with prices up 50% from the 2020 lows, reaching their highest level since 2017,” Goldman Sachs analysts said in a research note Monday.

“This current price strength is not an irrational aberration, rather we view it as the first leg of a structural bull market in copper.”

‘Some way from its limit’

Goldman analysts raised their 12-month forecast for copper to $9,500 per metric ton, up from a previous estimate of $7,500.

The Wall Street bank said it now expects a sustained, higher average price for 2021 and 2022. It has