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Base Metals Tracking: Copper Market – A Game of Physical Tensions and Fading Macro Sentiment (Goldman Sachs)

2026-07-20·ima-daily5min-0720-20-ee6679dbe6

Street Signal | Base Metals Tracking: Copper Market – A Game of Physical Tensions and Fading Macro Sentiment (Goldman Sachs)

Goldman Sachs released its weekly base metals report, focusing on the current core contradictions in the copper market. The report pointed out that the copper market is facing a game between "physical tension" and "macro sentiment fading".

On the one hand, the tight value-added tax on scrap copper in China has led to a tight supply of scrap copper, pushing smelters to switch to cathode copper. At the same time, smelter maintenance has led to a month-on-month decline in domestic cathode copper output, and the supply side is tight.

On the other hand, concerns about the macro demand outlook (such as slowing economic growth in China) continue to suppress market sentiment. The logic behind it is that there is a significant divergence between short-term supply and demand fundamentals (physical tightness) and medium- and long-term macro expectations (weak demand).

The market's concerns about macro risks may have been partially reflected, but short-term supply-side tensions (such as the impact of copper scrap policies) may have been insufficiently priced. One-sentence conclusion: Copper prices are supported by tight physical supply in the short term, but the shadow of weak macro demand lingers.

Prices will remain volatile in the long-short game, and unexpected tightening on the supply side may bring about periodic upward opportunities. Good/bad: Good for copper mining stocks (such as Zijin Mining and Jiangxi Copper) in the short term, but long-term depends on macro demand.

The market has expected weak macro demand (price in), but the upside risks brought about by unexpected tightening of the short-term supply side (such as the copper scrap policy) may not be fully priced. Catalysts:

1) The strictness of China’s scrap copper value-added tax policy implementation;

2) Quarterly output reports from major global copper mines;

3) Chinese and global macro data (such as PMI, industrial added value), especially areas related to copper consumption.

Full text

Base Metals Tracking: Copper Market – A Game of Physical Tensions and Fading Macro Sentiment (Goldman Sachs)

Goldman Sachs released its weekly base metals report, focusing on the current core contradictions in the copper market.

Goldman Sachs released its weekly base metals report, focusing on the current core contradictions in the copper market. The report pointed out that the copper market is facing a game between "physical tension" and "macro sentiment fading". On the one hand, the tight value-added tax on scrap copper in China has led to a tight supply of scrap copper, pushing smelters to switch to cathode copper. At the same time, smelter maintenance has led to a month-on-month decline in domestic cathode copper output, and the supply side is tight. On the other hand, concerns about the macro demand outlook (such as slowing economic growth in China) continue to suppress market sentiment. The logic behind it is that there is a significant divergence between short-term supply and demand fundamentals (physical tightness) and medium- and long-term macro expectations (weak demand). The market's concerns about macro risks may have been partially reflected, but short-term supply-side tensions (such as the impact of copper scrap policies) may have been insufficiently priced. One-sentence conclusion: Copper prices are supported by tight physical supply in the short term, but the shadow of weak macro demand lingers. Prices will remain volatile in the long-short game, and unexpected tightening on the supply side may bring about periodic upward opportunities. Good/bad: Good for copper mining stocks (such as Zijin Mining and Jiangxi Copper) in the short term, but long-term depends on macro demand. The market has expected weak macro demand (price in), but the upside risks brought about by unexpected tightening of the short-term supply side (such as the copper scrap policy) may not be fully priced. Catalysts: 1) The strictness of China’s scrap copper value-added tax policy implementation; 2) Quarterly output reports from major global copper mines; 3) Chinese and global macro data (such as PMI, industrial added value), especially areas related to copper consumption.

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