(Reuters) - Goldman Sachs sees more risks to the upside than the downside for metals demand in China, the bank said on Tuesday, playing down concerns of a sharp decline from policy changes.
“Concern about a sharp slowdown in metals demand as the country adopts a new ‘quality over quantity’ growth model may be overblown,” it said, adding that metal producers apart from China are set to gain.
“Ongoing supply-side reforms and environmental cuts in China translate into higher commodity prices and less Chinese production, both of which benefit ex-China producers.”
Over the next six months, it sees an upside to demand for zinc and over the longer term it prefers copper to aluminium, Goldman said.
The bank has forecast copper at $7,500 per tonne and aluminium at $1,900 a tonne in 2020.
Reporting by Nithin Prasad in Bengaluru; editing by Jason Neely