Goldman Sachs analysts are tipping the copper price to keep rising, despite the metal just topping its June high.
ASX mining shares with exposure to copper include Rio Tinto Limited (ASX: RIO), Oz Minerals Limited (ASX: OZL), Sandfire Resources Ltd (ASX: SFR) and Hot Chili Ltd (ASX: HCH).
Rio shares are leaping 1.4% today, while Sandfire Resources shares are leaping 1.21%. Hot Chili shares are leaping 5.06% and Oz Minerals shares are 0.02% in the green at the time of writing.
So what is the outlook for the copper price?
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Copper price tipped to jump higher
The copper price hit US$9,000 a tonne this week on the London Metal Exchange, its highest level since June.
However, a Goldman Sachs commodities analyst is tipping it to reach US$11,500 a tonne by the end of the year and US$15,000 in the long term.
Commenting on Bloomberg TV, Goldman head of commodities research Jeff Currie said:
Our target end of year is US$11,500…but longer term, we are in line with Trafigura, we see US$15,000 a tonne.
You know, there's a structural imbalance in these markets. You are likely to see peak copper supply in 2024.
Oz Minerals operates the Prominent Hill copper and gold mine in South Australia. In December, Oz Minerals advised Prominent Hill ore reserves have lifted 23% to 59 Mt at 1.4% copper equivalent. BHP Group Ltd (ASX: BHP) is proposing to acquire 100% of Oz Minerals, with a scheme meeting expected to take place in late March or early 2023 this year.
Rio Tinto explores copper from multiple projects globally and produced 138,000 tonnes of copper in the third quarter of 2022. This was a 10% lift on the third quarter of 2021. Sandfire is also developing multiple copper projects in the USA, Botswana, Spain and Australia. Hot Chili is developing the Costa Fuego copper hub in Chile.
Why is copper tipped to go higher?
Goldman's Currie highlighted the role of copper in decarbonisation, describing copper as "the new oil". He said:
You cannot decarbonise the world and use electricity to the extent we expect without substantial copper consumption.
Meanwhile, China's reopening is also being slated as a possible reason for investor optimism in the copper sector.
Marex analyst Alastair Munro, also commenting on Bloomberg, highlighted the impact of increased demand from China. He said:
You've got more of these commodity trade adviser and discretionary fund bids on copper. There has been Chinese buying onshore.
Share price snapshot
The Rio Tinto share price has leapt 13% in the last year
Oz Minerals shares have slid nearly 3% in the past 52 weeks.
Sandfire Resources shares have descended nearly 9% in the past year.
Hot Chili stocks have plummeted 45% in the last year.
