Goldman warns on copper as Iran war threatens global economy.

While Goldman’s base case is for the strait to begin re-opening from mid-April, the analysts said that copper was already trading well above its estimated fair value of about US$11,100 (RM44,811) a ton. Prices have already fallen about 7% since the US and Israel launched attacks on Iran.

Copper is still getting support from a tight market outside the US and the prospect of widespread strategic stockpiling, the analysts said. But those factors could become less decisive in the event of the bank’s “severely adverse” scenario for the global economy, they added.

“The copper price is not being supported at the current level by fundamentals, making it vulnerable to another move lower should the economic outlook deteriorate and investors de-risk,” they wrote. The bank trimmed its base-case forecast for copper this year to an average of US$12,650 a ton, down from US$12,850. The metal has averaged about US$12,850 a ton so far this year.