Copper is headed for a seven-year-long bear market cycle, Goldman Sachs said in a report Wednesday, slashing its medium to long-term targets.
"It is, in our view, highly likely that the four-year trend decline in copper prices is set to continue through at least 2018," it said.
Goldman cut its three-, six- and 12-month copper price forecasts to $5,200, $4,800 and $4,800 per ton respectively, from $5,500, $5,550 and $5,200. On a longer term basis, it cut its 2017 and 2018 forecasts to $4,500 a ton from $7,000 and $8,000 respectively. It doesn't expect the copper price to rise above the metal's marginal cost until 2020.
That's quite a drop from the red metal's rally in 2011 to a record high of over $10,000 a metric ton amid a surge in demand from China's housing boom.
Prices of copper – the industrial metal used to make everything from cars to houses – have long been seen as a temperature gauge for the global economy.