The sharp rally in metals and bulk commodities was “too much too fast,” because the impact of Donald Trump’s infrastructure plan on global demand was tiny compared to that of China, Goldman Sachs analysts cautioned in a report. In his victory speech on Wednesday, Trump proposed a “$1 trillion over a 10-year period” infrastructure stimulus plan, sending iron ore prices up about 5 percent to around $74 a metric ton soon after. Iron ore traded around $80 a ton on Monday, compared to all-time lows around $38 a ton hit 11 months ago. Meanwhile, copper prices spiked about 8 percent to above $6,000 a metric ton on Friday before retreating on Monday in Asia, with three-month copper futures on the London Metal Exchange priced around $5,620 a ton. Goldman’s analysts cautioned on the rapid nature of the run-up, which they said was not sustainable. “We believe that the initial reaction in iron ore and copper prices has been excessive and reiterate our view for sequentially lower prices,” they wrote in the report released on Friday.
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