Goldman Sachs Forecast: USD will be Weak, Copper Price will be Rised, in 2023.

Nov 24.2022

Goldman Sachs Forecast: USD will be Weak, Copper Price will be Rised, in 2023.

[Editor by Mr. Daniel Yao, at Seebest News Center, updated at 15:00pm Beijing Time, Thursday, November 24, 2022]

An analyst at Goldman Sachs said on Wednesday that due to the expectation that the United State Dollar will weaken, the global economic environment will be more favorable for commodities in the middle of 2023, while China's reopening from the COVID-19 restrictions will boost risk appetite.

Since this year, with the Federal Reserver rates on a large scale to curb inflation, the prices of commodities from oil to metals have been hit by the strength of the US dollar.

Goldman Sachs expects that the Federal Reserve will suspend monetary tightening policy before the second quarter of next year, which will bring pressure on the dollar and ease commodity prices to some extent.

Goldman Sachs

Nicholas Snowdon, a metal strategist at Goldman Sachs, said at the CRU Asia World Copper Conference: "As we enter the middle of 2023, the environment will be more favorable for commodities, especially copper".

Snowdon said that although this year's copper price gap is estimated to be about 200,000 tons, the strengthening of the US dollar has been the key factor to depress copper prices. The strength of the dollar makes dollar denominated commodities more expensive for holders of other currencies.

He added: "We believe that the strength of the US dollar is the reason for two-thirds of the fall in copper prices this year." Snowdon said that although the US economy is slowing, Goldman Sachs does not expect a recession in the world's largest economy.

He said that China's reopening from the Covid-19 restrictions would encourage investors to invest more capital in risky assets, although this would only produce a small boost to the actual consumption of copper.

LME copper price

Based on the above information, Mr. Ying Fayang, General Manager of Xiamen Seebest Wire & Cable Co., Ltd., has convened all shareholders and management teams to hold a conference at 10:00am this morning in the meeting room. If the US dollar falls and the copper price rises in 2023, what impact will it have on the cable industry, China and our company? To this end, what measures should we take to deal with this situation, seek advantages and avoid disadvantages, minimize losses, and try to improve the sales and profits of our products.

It was decided at the meeting that "Seebest Cable" will adhere to the Business Philosophy of "Honesty Faithfully, Quality First, Professional Service, Customer Experience" always, try to meet customers requirements, help them to solve the problems, and establish a long-term, mutually beneficial and jointly developing cooperative relationship with the customers.

The meeting made it clear that if the dollar fell, "Seebest Cable" would appropriately raise the exchange rate to avoid losses.

If the copper price rises, "Seebest Cable" will pay close attention to and analyze the change trend of copper price, keep close communication and negotiation with suppliers in time, and ask them to provide the most favorable price as far as possible.

It was emphasized at the meeting that "Seebest Cable" would indicate on the quotation that "The above prices are valid today, please confirm the cable price with us before placing the order, because the copper price and exchange rate change has been changed usually" in the Quotation List.

Tips:

"Xiamen Seebest Wire & Cable Co., Ltd.", is a modern manufacturing enterprise specializing in the research, development, production, sales and service of cable products for domestic and foreign customers.

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