Macquarie has reduced its forecast for copper prices over CY22 to CY24 by 5% to 15%.
According to The Australian, the broker reckons softening demand is "set to widen the surplus".
As is usual with ASX mining shares, a change in copper price forecasts has a flow-on effect on the performance expectations for ASX 200 copper shares.
The article stated:
The downgrades have a material impact on near-term earnings forecasts for copper pure plays, with earnings estimates for Oz Minerals, Sandfire and 29Metals down by 30% to 90%.
Down those 12-month price targets go for ASX 200 copper shares
On the back of these forecasts, Macquarie has also reduced its share price targets for multiple ASX 200 copper shares.
The broker cut its price targets on Oz Minerals Limited (ASX: OZL), Sandfire Resources Ltd (ASX: SFR) and 29Metals Ltd (ASX: 29M) by 9% to 17%.
Of course, Sandfire and 29Metals are outside the ASX 200. But the broker has also cut its projections on two of the big ASX 200 miners that are not copper pure-plays but they do produce the red metal.
Macquarie cut its 12-month share price target for BHP Group Ltd (ASX: BHP) to $42, and Rio Tinto Limited (ASX: RIO) to $97.
Today, the copper pure-plays are a mixed bag. The Oz Minerals share price is only just in the green, up 0.12% to $25.33 at the time of writing. Meantime, the Sandfire Resources share price is down 3.2% to $3.93. The 29Metals share price is down 2.1% to $1.88.
What about the long-term outlook for copper?
The market was abuzz in early August when BHP made a surprise takeover bid of Oz Minerals.
The offer was for $25 cash per share, about a 35% premium on the Oz Minerals share price at the time.
The Oz Minerals board quickly rejected the offer, saying it "significantly undervalues" the company.
But the mere fact that the biggest resources company in the ASX 200 made a play for it certainly communicated a lot to investors about the critical role of copper in our decarbonised future. Kinda says something about the long-term outlook for copper in general, right?
The Oz Minerals share price has held firm this week despite the company reporting a 60% profit plunge in its half-year results on 26 August.
