Copper prices could test higher highs on supply concerns. Which is why there’s still time to invest in the copper trade. However, before you make a decision to invest in copper, it’s important to understand what’s driving this bullish move.
It comes down to energy. Copper is needed in virtually every aspect of our new economy. Every electric vehicle (EV), solar array, and artificial intelligence (AI) data center depends on it. Yet since 1990, copper grades have been cut in half while consumption keeps accelerating.
That’s changing for two key reasons. First, traders have been boosting copper shipments to the U.S. amid speculation that the Trump Administration could impose new import tariffs in the new year. This could squeeze supply in other regions.
Second, demand for copper has been growing even faster thanks to the artificial intelligence boom in data centers and renewable energy. And that’s saying nothing about the need to update the U.S. electric infrastructure.
All of which is a strong catalyst for copper stocks, such as Rio Tinto Group (OTCMKTS: RTNTF), Freeport-McMoRan (NYSE: FCX), BHP Group (NYSE: BHP), and Teck Resources (NYSE: TECK).
According to The Wall Street Journal, "Goldman Sachs raised its copper price forecast for the first half of next year to an average of $10,710 a ton from $10,415 previously, citing constrained mine-supply growth and structural demand from grid and power infrastructure. It also said physical traders suggest copper shipments into the U.S. could accelerate more than expected in early 2026. Copper prices are also supported by growing expectations that the Federal Reserve will lower interest rates further this year."
In addition to the copper stocks mentioned, ETFs are also a great option for playing the copper trade. Not only do ETFs offer solid diversification, but they also do so at a lower cost.
Copper Trade: Global X Copper Miners ETF
First on this list is the Global X Copper Miners ETF (NYSEARCA: COPX). The ETF allows you to diversify with 40 copper-related holdings. This includes a heavy emphasis on miners including: Lundin Mining, Glencore, Southern Copper, BHP Group, Freeport-McMoRan, Ero Copper, and Taseko Mines.
Copper's favorable supply-demand balance gives miners the ability to generate cash throughout the entire business cycle. This reduces balance sheet risks and supports capital allocation budgets.
The fund does carry an expense ratio of 0.65%. That’s a little pricey, but you have to balance that out with a fund that’s delivered a total return of over 162% in the last five years.
Since bottoming out at around $30.60 in April, the COPX ETF rallied to a high of $67.50. From here, we'd like to see it test $80 a share.
Another option for investors looking at the copper trade is the iShares Copper and Metals Mining ETF (NASDAQ: ICOP). Like the Global X Copper Miners ETF, this fund focuses on global copper and metal ore miners including Anglo American, BHP Group, Freeport-McMoRan, Newmont, Lundin Mining, and Teck Resources,
The fund has a more favorable expense ratio of 0.47%. The fund was launched in 2023 and is up 79.15% in that time.
Since bottoming out at around $21 in April, the ICOP ETF is now up to $41.76 a share. From here, given the strength of the copper rally, we'd like to see it closer to $50 a share.
Final Thoughts on the Copper Trade
Copper remains a core pillar of the energy transition and the digital infrastructure boom. With supply tightening and structural demand rising, the case for continued upside remains intact. Whether through individual miners or diversified ETFs, investors have multiple ways to participate in the trade. As electrification and AI expansion accelerate, copper's role, and its investment potential, only grows stronger.
0 Response to "🤔 Bitcoin Is Dead?"
Post a Comment