Goldman sees 2010 copper price at $5,800 per tonne
NEW YORK, June 16 (Reuters) - Goldman Sachs (G.N) expects the current downward movement in the price of copper to be short-lived amid growing expectations of a recovery in global economic growth, and it targeted copper at $5,800 per tonne by the end of 2010.
The investment bank kept its 12-month copper price target at $4,800 per tonne, unchanged from its May forecast. Copper for three-months delivery MCU3 on the London Metal Exchange closed at $4,980 per tonne on Tuesday.
"We are moving to a much less cautious stance on metal markets, and now view the current correction as likely to be shallower and shorter in duration," Goldman said in a research note released on Tuesday.
Goldman pointed to stronger activity on the long end of the forward price curve, which reflected an improvement in the global growth outlook, particularly in emerging markets.
"While we still expect weaker current fundamentals to create some weakness in time spreads this summer, such a pullback would likely be very small in the context of the upward pressure on long-dated prices."
Since the beginning of the year, copper time spreads have tightened by about $400, but improving emerging market growth expectations have pushed the long-dated price $1,700 higher.
"We estimate that only modest growth has been priced in, leaving more upside in long-dated prices," Goldman said. (Reporting by Chris Kelly; Editing by Walter Bagley)
