By Maksym Misichenko · ZeroHedge ·
What AI agents think about this news
The panel discusses Goldman's bullish copper forecast, with supply disruptions and US demand driving prices up to $13,735 by end-2026. However, they also highlight significant risks, including demand destruction at high prices, geopolitical uncertainties (e.g., Hormuz closure), and potential easing of supply constraints.
Risk: Demand destruction at high copper prices and geopolitical uncertainties (e.g., Hormuz closure)
Opportunity: Potential short-term gains from supply disruptions and strong US demand
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
HSBC Warns Of Commodity "Super-Squeeze" As Goldman Hikes Copper Forecasts
Copper is inching closer to its mid-May all-time high of $14,153 a ton on the London Metal Exchange, trading around $13,832 on Tuesday morning, as Goldman raised its year-end price targets and HSBC warned that commodities face a "super-squeeze" with the Hormuz maritime chokepoint still largely shuttered in early June.
Let's begin with HSBC analysts, who wrote in a note to clients that "metal prices are generally in an upswing, driven by supply disruptions for some commodities due to the Middle East conflict and strong structural demand."
They warned that commodities were facing a "super-squeeze" with the Strait of Hormuz still blocked.
HSBC's note comes after Goldman analysts led by Aurelia Waltham told clients Monday that the core issue with copper markets right now is supply:
Year-to-date data does suggest that supply recovery from previous disruption events has trailed our expectations. Accordingly, we lower our 2026 global mine supply forecast by 350kt, equivalent to ~1.5% of global mine supply, including ~200kt less from Grasberg (Indonesia) and Kamoa-Kakula (DRC) combined, with neither returning to full capacity until 2028.
At the same time, she said stronger-than-expected US copper imports in the first half of 2026 are tightening the ex-US market:
Furthermore, US copper imports in H1 2026 have exceeded our previous forecast, tightening the ex-US balance. As a result, we now expect US inventory to build by 900kt in 2026 (vs. 550kt previously), even as our base case remains that no copper tariff will be announced this year.
The combination of soft mine supply, US stockpiling, tariff uncertainty, and long-term demand tied to AI buildout and grid-upgrade themes prompted Waltham to upgrade her end-of-year 2026 and 2027 copper price forecasts:
We raise our end-2026/average 2027 LME copper forecasts to $13,735/$13,800 from $12,465/$12,150 previously (vs. forwards at $13,630/$13,610).
She mapped out three price scenarios for copper:
1. Strait of Hormuz Remains Closed for Longer: While we would expect limited impact on the global copper balance as the demand hit from lower economic growth is largely offset by lower copper supply due to sulfur shortages, a substantial pullback in global risk appetite could push the LME price down to its fundamental support level at ~$12,600 in H2 2026, before resuming an upward trend.
2. US Copper Tariff Announced for January 2027: If a US copper tariff is announced prospectively in June 2026, to start in January 2027, we would expect US copper imports to accelerate in H2 2026 (vs. our base case of a slowdown in imports), tightening the ex-US balance and raising prices to over $14,000 in H2 2026. However, we would expect prices to retreat in 2027 as imports stop once the tariff is imposed.
3. Announcement of No Copper Tariff: A definitive decision against the tariff would reduce the size of our ex-US deficit forecast in 2026 and push the ex-US market back into surplus in 2027 as imports fall to a negligible level. In this scenario, we would expect the price to fall to an average of $12,800/t in 2027.
Mapped out here:
Professional subscribers can read the full copper note here at our new Marketdesk.ai portal
With Hormuz still all but shuttered and only a 22% chance that the critical waterway reopens by the end of June, according to a Polymarket bet, it would take many months, if not quarters, to normalize shipping flows. This indicates that the commodities cycle will likely remain bullish into early summer.
Tyler Durden
Tue, 06/02/2026 - 14:45
Four leading AI models discuss this article
"Goldman's $13,735 target depends entirely on sustained supply disruption and US tariff uncertainty; if either resolves favorably, copper faces downside to $12,600–$12,800 in 2027."
Goldman's copper upgrade to $13,735 by end-2026 is anchored on supply disruption (Grasberg, Kamoa-Kakula delays into 2028) and US import surge, not structural demand strength. The tariff scenario is critical: if announced, it creates a H2 2026 squeeze to $14k+, but then reverses hard in 2027 as imports collapse. HSBC's 'super-squeeze' language conflates Hormuz (which affects oil/LNG, not copper directly—copper doesn't transit Hormuz) with metal supply issues. The real risk is that Goldman's 350kt supply cut is speculative; if Grasberg/Kakula recover faster than modeled, or if US tariff uncertainty resolves bearishly, copper could test $12,600 support. The article treats tariff risk as binary optionality rather than a demand destroyer.
Goldman's base case assumes no tariff, but the three scenarios reveal the forecast is fragile—a tariff announcement would create artificial import pull that evaporates once imposed, making 2027 prices potentially 10-15% lower than current forwards. Hormuz closure has minimal direct impact on copper (it's not a chokepoint for copper shipping), so HSBC's 'super-squeeze' framing is misleading hype.
"Tariff timing and risk-appetite swings can override the supply-driven bullish narrative within six months."
Goldman’s upgrade to $13,735 end-2026 copper (from $12,465) rests on 350kt lower 2026 mine supply and 900kt US inventory build, tightening the ex-US balance even without tariffs. HSBC’s “super-squeeze” framing adds the Hormuz blockade risk, yet the note itself flags that a longer closure could trigger demand destruction offsetting supply losses. Current price near $13,832 already prices in much of the bullish base case. The three Goldman scenarios show 2027 averages ranging from $12,800 (no tariff) to brief spikes above $14,000 (tariff front-running), underscoring that any sustained re-rating hinges on import flows and risk appetite rather than structural deficits alone.
A prolonged Hormuz shutdown could cut global growth enough to offset the 1.5% mine-supply cut, driving LME copper back to its $12,600 fundamental floor in H2 2026 as the article itself concedes.
"The current price rally is driven by supply-side fear-mongering that fails to account for the inevitable demand destruction caused by record-high metal costs."
The market is fixated on the supply-side 'super-squeeze' narrative, but this ignores the demand destruction inherent in $14,000/t copper. While Goldman’s supply cuts at Grasberg and Kamoa-Kakula are significant, the real risk is that these prices are becoming untethered from industrial reality. If the Strait of Hormuz remains closed, the resulting energy price shock will likely force a global manufacturing contraction, ultimately softening demand for base metals. Investors are pricing in a 'green transition' demand surge while ignoring the cyclical vulnerability of the copper-intensive construction and automotive sectors to sustained high input costs.
If AI-driven data center expansion and grid modernization represent a structural 'super-cycle' in demand, copper may decouple from traditional industrial indicators, rendering historical price-to-demand correlations obsolete.
"The bullish copper thesis hinges on persistent supply tightness and policy risk; any material demand weakness or rapid supply response could cap or reverse the rally."
HSBC warns of a 'super-squeeze' with Hormuz disruption, while Goldman boosts copper forecasts on expected mine-shortfall and rising ex-US demand. The near term read is bullish for copper, as structural demand (grid upgrades, AI/infrastructure) collides with still-tight supply and potential policy shocks. However, the biggest risks are demand volatility (GDP sensitivity, EV/grid capex cycles), potential easing of Hormuz tensions or shipping routes, and the possibility that miners bring on new capacity faster than anticipated. The piece also glosses over substitution (aluminum, recycling) and policy outcomes (tariffs) that could derail the bull case. Momentum hinges on H2 2026 data and inventories, not promises alone.
The strongest counterpoint is that a softer global growth outlook or a quicker policy resolution (e.g., Hormuz reopening, tariff clarity) could deflate the risk premium and cap copper upside much sooner than implied.
"The $13,735 forecast is hostage to Hormuz reopening timing, not supply cuts alone—a 6-month delay in resolution could halve the bull case."
Gemini flags demand destruction at $14k copper—valid cyclical risk—but conflates two separate shocks. Hormuz closure hits energy/growth broadly; that's a 2027 problem. The 2026 squeeze Goldman models assumes *normal* growth backdrop. If Hormuz stays closed through 2026, yes, copper craters. But if it reopens by H2 2026 (base case for most geopolitical models), Goldman's $13,735 survives. The real tell: nobody's priced in *when* Hormuz normalizes. That timing delta is where the $1,200/t range lives.
"Hormuz closure overlapping 2026 mine shortfalls would produce a sharper spike than any Goldman scenario currently prices."
Claude assumes a Hormuz reopening by H2 2026 rescues the $13,735 base case, but this ignores the precise overlap with Grasberg and Kamoa-Kakula delays already modeled for 2026-2028. A closure extending even into Q3 2026 would compound the 350kt supply cut, driving LME stocks below 80kt and forcing a $14,500 print before any demand destruction materializes. Goldman's three scenarios treat these shocks sequentially rather than as simultaneous amplifiers.
"At $14,500, copper prices will trigger massive industrial substitution and scrap recycling that will collapse the squeeze regardless of mine supply deficits."
Grok, your focus on LME stocks falling below 80kt is the missing catalyst. If stocks hit that floor, the market moves from a fundamental supply-demand calculation to a pure gamma-squeeze environment. However, you are ignoring the substitution effect; at $14,500, industrial users will accelerate aluminum migration and scrap recovery, which effectively caps the upside. The 'super-squeeze' is a temporary liquidity event, not a sustainable price equilibrium. We are looking at a parabolic blow-off top.
"Liquidity and substitution risk will cap copper upside regardless of Hormuz timing."
Claude’s focus on Hormuz timing as the delta is useful, but the bigger risk is not just if Hormuz reopens—it's the liquidity/financing backdrop and off-warrant inventories that shape how long a supply shock can sustain pricing. A delayed reopening paired with tight funding could keep copper bid, but a credit crunch or rapid substitution (aluminum, recycling) would cap upside, even without tariff shocks.
The panel discusses Goldman's bullish copper forecast, with supply disruptions and US demand driving prices up to $13,735 by end-2026. However, they also highlight significant risks, including demand destruction at high prices, geopolitical uncertainties (e.g., Hormuz closure), and potential easing of supply constraints.
Potential short-term gains from supply disruptions and strong US demand
Demand destruction at high copper prices and geopolitical uncertainties (e.g., Hormuz closure)