Commodities: Copper
The copper (Cu) price and sector finally found some relief last week with BHP Group (ASX:BHP) managing to close more than 6% higher although pure play Sandfire (ASX:SFR) struggled to post a 2% gain, it still outperformed the index.
BHP delivered a solid 1H FY26 result in February, with revenue and underlying profit broadly in line with expectations, while beating on the dividend. Operationally, production across iron ore and copper rose modestly, but the key highlight was the earnings mix, with copper now contributing 51% of group earnings. Guidance was also upgraded at key copper assets, reinforcing the improving momentum in this growth division.
In February, Rio reported a broadly in-line FY25 result, with earnings essentially flat as strength in copper and aluminium was offset by ongoing weakness in iron ore, driven by China’s soft property market. Revenue and earnings came in slightly ahead of expectations, while free cash flow was weaker year-on-year. Guidance was maintained, pointing to steady operational performance.
Copper and its related names have come under pressure through March on economic fears with the US-traded COPX extending its decline on Friday night, taking this months pullback to ~28%. It feels very uncomfortable at the moment but investors were never going to get a “cheap” entry into the global electrification thematic without such an event occurring.
Thanks for the gold shares breakdown yesterday, but I noticed EVN was missing and I understood MM were bullish on EVN. Has the view on EVN changed? Thanks
Hi guys, would love your view on s32. With the current sell off in commodities and its silver exposure, would you think it is a buy or is there a better way to get exposure now to base metals?
MM usually follows LME Copper for longer term trends but the Comex futures contract can paint a clearer intra-day picture, especially during periods of elevated volatility. Last night, copper reversed sharply from its lows, and it’s starting to look/feel like the industrial metal is at least looking for a low.
We are adding a new position to the Growth Portfolio.
Following an initial spike higher gold has struggled since war broke out with rising bond yields and a market caught long more than offsetting any safe haven bid. The gold price is flirting with the psychological $US5,000 level, about 10% below its late January high. However, the selling has accelerated across the related miners with the largest gold stock, Newmont, having corrected closer to 19% in the US.
