Goldman Sachs has expressed strong bullish sentiment toward the copper market in its latest research report while warning that aluminum prices are overvalued in the near term.

The investment bank reassessed the long-term outlook for copper and aluminum, raising its 2035 copper price forecast to $15,000 per ton—significantly above the market consensus of $10,900 per ton. Goldman's new "long-term copper incentive curve" pricing model indicates that copper prices will remain capped below $11,000 per ton in 2026-2027 due to a slight market surplus. However, supply deficits are expected later this decade due to resource constraints and growing demand in key sectors.

Meanwhile, Goldman maintains a bearish stance on aluminum, forecasting prices to drop to $2,350 per ton by Q4 2026 and not recovering to current levels until the early next decade. The bank expects new supply to push the market into surplus, noting that while aluminum demand will benefit from similar drivers as copper and substitution effects, it won't face the same resource limitations.

**Copper: Supply Constraints to Drive Post-2028 Price Surge** Goldman's innovative pricing model suggests higher copper prices, incorporating factors like scrap recycling, substitution effects, mine life extensions, and adjustments for stalled and emerging projects. The bank slightly raised its 2026 copper price forecast to $10,500 per ton (below consensus) but highlighted a more bullish long-term view: $15,000 per ton by 2035 ($11,500 in 2025 dollars or $5.20/lb), well above market expectations. Forecasts for 2029 and 2030 were also lifted to $12,000 and $12,250 per ton, respectively.

Three key factors underpin Goldman's projected copper supply gap: 1. **Slower-than-expected mine depletion but rising long-term costs**: While 2024 output exceeded 2014 forecasts due to extended mine lives, ore grades have fallen 25%, requiring 33% more ore to produce the same copper volume and driving up operating costs. 2. **Congo’s growth faces limits**: Despite accounting for 14% of global production (8% of reserves), Congo’s potential 500kt output increase is constrained by geopolitical tensions, low exploration spending, and Africa’s limited undiscovered copper resources (just 5% globally). 3. **Aluminum substitution dampens copper demand**: A $1,000/t copper-aluminum price gap boosts net substitution by 0.1%, reducing refined copper demand by 175kt by 2035.

Goldman’s scrap supply model suggests a ~75% post-consumer recycling rate ceiling, with a 10% price hike raising recycling by 0.8%—though diminishing near 80%. At $12,250/t (2030 forecast), a 12.5% price increase would lift recycling by 2%, adding 350kt annually.

**Aluminum: Overpriced Now, Supply Growth to Weigh** Goldman expects aluminum prices to fall to $2,350/t by late 2026 as new supply creates a surplus, with a recovery only by the early 2030s. Long-term, prices are projected at $2,900–3,400/t (2025 dollars: ~$2,600/t) for 2030–2035. Unlike copper’s global resource crunch, aluminum faces regional power constraints: - Power (35% of operating costs) remains a hurdle, with producers in Europe and North America struggling to secure long-term contracts below $50/MWh. - New supply may rely on cheap coal power ($40–60/MWh), placing capacity in the cost curve’s second quartile. Prices of ~$2,500/t (2025 dollars) could incentivize new projects in India/Indonesia by 2026–2030, rising to ~$2,600/t for frontier regions by 2030–2035. This would lift the copper-aluminum price ratio from 3.8:1 (2025) to 4.4:1 by 2035.

Global aluminum output is forecast to grow by ~13Mt from 2025–2035, with Central Asia, Iran, and sub-Saharan Africa emerging as new hubs. Projects include China’s East Hope Group’s $12B Kazakhstan aluminum complex and Yunnan Construction’s Tajikistan exploration.