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Investing.com -- Goldman Sachs Group Inc (NYSE:GS). maintained its copper price forecast despite the Trump administration’s surprise decision to exempt refined copper from import tariffs.
The bank expects London Metal Exchange (LME) copper to drop to a low of $9,550 per ton in August before rebounding to $9,700 per ton by December, according to analysts including Eoin Dismore in a recent note.
LME copper was trading at $9,668 per ton, down 0.3% at the time of the report.
Goldman analysts predict that following the announcement, copper cathode will likely flow into US LME warehouses due to high US copper cathode inventories, though large-scale re-export of cathode from the US is unlikely.
"While we are surprised by the near complete roll-back on the proposed copper tariffs, we think this shows the Trump Administration is still focused on security of supply for copper," the analysts wrote.
"The US can now shift focus to agreeing minerals deals overseas, and over time introducing tariffs," they added.
Goldman suggests the market should assign at least a 25% probability that the administration will impose a 15% tariff in 2027, or possibly earlier. This outlook should keep Comex prices at least at parity with the LME.
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