24/7 Wall St.

Copper is one of the metals that really matters at the street level of the global economy. The price of gold is much more exciting about the price of copper, but copper is used in just about every major and minor building that exists in the world and China accounts for somewhere around 40% of its demand. It was less than two weeks ago when Goldman Sachs lowered its target for the price of gold, and now we have seen that Goldman Sachs has become bearish on copper prices.

The new target price from Goldman Sachs is by about 12% to $3.17 per pound from $3.62 previously. The only good news in the call is that Goldman Sachs believes that economic activity in China is still stronger than what the market is giving it credit for. The firm also thinks that there is a good chance for the price of copper to bounce in three months to six months. On a longer-term basis, the fear is that more mining capacity is coming online and that supply is going to outstrip demand.

Another concern is the growing stockpiles that have been reported in the London Metals Exchange. Copper inventories there are apparently up a whopping 92% since the start of 2013. Today’s slash was on the heels of a similar call from Citigroup late week, although those forecasts were only by just over 5% to $3.40 per pound this year.

iPath DJ-UBS Copper TR Sub-Idx ETN (NYSEMKT: JJC) hit a new 52-week low today at $38.68 and the exchange-traded product was down 0.5% at $38.98 shortly ahead of the closing bell. Oddly enough, Southern Copper Corp. (NYSE: SCCO) was up over 1% at $32.33 against a 52-week range of $27.72 to $42.03 ahead of the closing bell.