Goldman 'Most Constructive' on Copper


"We believe a demand-rationing environment still lies ahead."


Goldman Sachs Group remains "most constructive" on copper and zinc prices, with the recent sharp selloff in copper a "buying opportunity," according to a research report.

"Although we maintain that slower copper demand growth has deferred the drawdown in copper inventories to critically low levels into 2012, we believe that such a demand-rationing environment still lies ahead," the report said. "We note, however, that several price and fundamental data points in China suggest that demand is holding up."

Zinc's recent underperformance and expectation that demand growth will outpace supply growth supports Goldman's constructive view of the metal, the report said.

Production cost inflation will continue to support aluminum and nickel, the report said. Goldman raised its price forecast for the two metals, shifting to a "more neutral" outlook.

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