Goldman Sachs Bullish on Copper Prices as Increased Use of Electric Vehicles Boosts Copper Demand

According to foreign media on July 6, Goldman Sachs said that the increase in the use of electric vehicles (EV) is a "key driving factor of bullish copper prices". It is expected that the industry's copper demand will reach 1 million mt this year and will increase to 1.5 million mt in 2025.

"Due to its high electrical conductivity and ductility, copper is ideal for power conversion and transmission in electric vehicles," the bank said in a note on Wednesday.

Electric vehicle production accounted for about two-thirds of the increase in global copper demand last year and could account for about 27% of new copper consumption over the next 10 years, the bank said.

Goldman Sachs said its analysts are bullish on EVs, expecting “strong sales in China through the remainder of 2023, driven by lower EV prices and higher demand.”

Benchmark copper on the London Metal Exchange (LME) fell 7.5% in the second quarter of 2023 amid a slow recovery in Chinese demand and concerns over global growth.

However, copper use in EVs is likely to decline in the longer term, with copper use likely to drop to 65kg per EV by 2030, compared with 73kg in 2022, the bank said.