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Investing.com -- Copper stands out as the strongest industrial metal heading into next year, according to new note from Goldman Sachs, which described it as the firm’s “favourite” metal for 2026.
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Goldman Sachs analyst Aurelia Waltham said copper’s appeal is driven by “constrained mine supply growth and structural demand growth from grid & power infrastructure,” a combination that shifts the market “towards balanced in 2026, from oversupplied in 2025.”
After a broad rally in metals this year, including copper’s all-time high above $11,200 per tonne, Waltham argued that the setup for next year is increasingly divergent across the complex.
The bank lifted its average H1 2026 copper forecast to $10,710 per tonne, noting that “higher ex-US premia and conversations with physical traders point to a larger-than-expected reacceleration of copper flows into the US in H1 2026 ahead of a potential tariff,” which should tighten the market further.
In contrast, Goldman Sachs said it expects aluminium, lithium and iron ore to come under renewed pressure.
The bank wrote that “strong supply growth – largely as a result of Chinese overseas investments – drives our bearish price forecasts for aluminium, lithium and iron ore,” projecting declines of 18%, 23% and 17% respectively by the end of 2026.
For aluminium specifically, Goldman Sachs maintained a Q4 2026 forecast of $2,350 per tonne, warning that current prices “incentivise too much new supply (particularly from Indonesia) relative to demand,” while potential material switching in autos adds downside risk.
Given the diverging fundamentals, the bank reiterated its recommendation to “go long copper, short aluminium (Dec-27)” as it expects the copper-to-aluminium ratio to reach new highs.