Goldman warns downside risk for copper, trims price target

Copper could see further downside risk if the war in the Middle East drags on and continues to disrupt the global supply chains by blocking the Strait of Hormuz, Goldman Sachs has warned.

“We see the near-term risks as skewed to the downside if strait flows remain disrupted for longer than our base case, which would keep energy prices higher for longer and likely slow global economic growth,” analysts including Aurelia Waltham wrote in a note this week.

Copper has come under pressure in recent weeks as rising energy prices from the war posed a threat on global economic growth, taming the demand prospects for a metal that is used in a wide array of industrial applications.

Despite a hot start to 2026 with a record surge past $14,500 a ton, copper has now erased all of its gains for the year and is down 2.5%. The war on Iran alone resulted in a decline of about 7%, taking copper prices to around the $12,000 level.

Earlier, analysts at Bloomberg Intelligence had projected that a drawn-out war disrupting flows through the Strait of Hormuz may cap demand for copper at about 0.5%–1% and send its prices down below the $10,000 level.

Price target lowered

While the Goldman analysts aren’t expecting such a drastic drop, further downward moves can’t be ruled out as long as the Middle East conflict remains unresolved and the slowing demand narrative persists.

As such, the bank has trimmed its base-case price target for 2026 to $12,650 a ton, down from $12,850 previously.

That scenario, as Waltham and co. have noted, assumes that the strait would begin re-opening from mid-April. A “severely adverse” scenario has even further downside risk.

“The copper price is not being supported at the current level by fundamentals, making it vulnerable to another move lower should the economic outlook deteriorate and investors de-risk,” the Goldman analysts wrote. 

Coincidentally, copper has averaged at about $12,850 a ton, which Goldman said was already “well above its estimated fair value of about $11,100 a ton.”