BofA raises long-term copper forecast on tightening supply outlook

Oct 1 (Reuters) - Bank of America raised its long-term copper price forecast, citing tightening supply outside the US and persistent market tightness in China, while warning that elevated oil prices and the ongoingIran conflict could continue to weigh on precious metals in the near term.

• The bank increased its 2031 copper price forecast by 20% to $13,577 per metric ton, driven by constrained copper availability outside the US due to continued inflows of copper into warehouse financing deals, and a tight domestic market in China.

• While the bank said the Iran war could limit upside for base metals in the short term, it expects supply-side pressures to provide support for prices over the longer run.

• In precious metals, the bank said that gold could fall toward $3,750 an ounce in the fourth quarter of 2026, while a rally in oil prices to $150 a barrel could drag average gold prices to around $3,500 an ounce next year.

• It said silver is likely to track gold more closely following weaker demand from solar panel manufacturers, while platinum should find support from a supply deficit.

• Palladium, however, is expected to remain under pressure due to oversupply and weaker demand from automakers.

• Elsewhere, Bank of America said it expects the coking coal market to remain in deficit this year and next because of production headwinds in China, supporting prices near $250 a ton.

• It also forecast a small surplus in lithium next year as output rises, while cautioning that higher cobalt prices may encourage carmakers to reduce their use of the battery metal.