Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the base metals industry, specifically copper and aluminium, with insights from Goldman Sachs analysts. Copper Market Insights - **Long-Term Price Forecast**: The long-term copper price is forecasted to reach $15,000 per ton by 2035, with a 2026 price forecast of $10,500 per ton, slightly below consensus due to a modest surplus in the near term [2][5][62]. - **Supply and Demand Dynamics**: A deficit in copper supply is expected to emerge later in the decade due to resource constraints and demand growth from critical sectors, which will drive prices higher [2][5]. - **Risks to Forecast**: The biggest risk to the $15,000 price forecast is unexpected growth in copper production from the Democratic Republic of Congo (DR Congo), which has historically exceeded market expectations [2][36]. - **Production Growth**: The forecast includes an additional 500,000 tons of production growth from DR Congo by 2035, but this is contingent on various geopolitical and economic factors [36][42]. - **Market Balance**: Current copper prices are seen as insufficient to balance the market over the next decade, necessitating a price of $15,000 per ton to maintain aging mines and incentivize new projects [5][61]. Aluminium Market Insights - **Price Forecast**: Aluminium prices are expected to decline to $2,350 per ton by Q4 2026 due to new supply entering the market, with a long-term forecast of $2,900 to $3,400 per ton from 2030 to 2035 [2][69]. - **Supply Constraints**: Unlike copper, aluminium does not face the same resource constraints, but power availability and financing are critical for new supply growth [6][71]. - **Regional Power Costs**: Power costs, which account for approximately 35% of operating costs for aluminium producers, are expected to influence supply growth, particularly in Europe and North America [6][69]. - **Investment in New Regions**: New aluminium production is anticipated to emerge in frontier jurisdictions such as Central Asia and Sub-Saharan Africa, driven by investments from Chinese firms [71][78]. Key Comparisons and Trade Recommendations - **Copper vs. Aluminium**: The copper-to-aluminium price ratio is projected to rise to 4.4:1 by 2035, compared to an average of 3.8:1 in 2025, indicating a stronger outlook for copper relative to aluminium [9][62]. - **Trade Strategy**: A trade recommendation has been opened for long positions in LME Dec-27 copper and short positions in LME Dec-27 aluminium, reflecting the differing price forecasts for the two metals [2][9]. Additional Insights - **Substitution Effects**: The report highlights the significant impact of substitution, particularly from copper to aluminium, which has been a consistent factor in the copper market [42][51]. - **Scrap Supply Limitations**: Historical overestimations of scrap supply growth have been noted, with capped post-consumer collection rates at around 75% [51][52]. - **Geopolitical Factors**: The US's involvement in DR Congo is expected to influence the pace of project development and production growth, potentially impacting global copper supply dynamics [36][42]. This summary encapsulates the critical insights and forecasts regarding the copper and aluminium markets as discussed in the conference call, providing a comprehensive overview of the current and future landscape of these industries.