Commodities: Copper
Hey guys, after the sell off in copper stocks, would you be buyers of SFR or WIRE at these levels? When do you think is a good time to establish a position or increase a position?
FCX is one of the world’s largest listed copper producers, operating major long-life mines in the Americas and Indonesia, with earnings highly leveraged to copper prices. After correcting ~20% from this year’s high on growth concerns tied to the Iran war, buyers emerged, and our preferred scenario is that the stock had already found a base, making the risk/reward attractive around the $US60 area.
One week in, and the Iran war has already severely disrupted global energy markets, with threats to shipping through the Strait of Hormuz effectively choking oil exports from the Persian Gulf and pushing crude prices to their highest levels in more than two years. As producers cut output and energy prices surge, the conflict is raising global inflation risks and intensifying concerns about energy security, particularly in Europe. The local market initially shrugged off last weekend’s US–Israel strikes on Iran, with the ASX200 closing at an all-time high on Monday. However, that early optimism quickly faded as investors began to acknowledge the conflict could last far longer than first imagined:
As we’ve discussed through today’s report we like the copper sector 10-15% lower which could happen in the next few days in the current volatile market. We’ve drawn our initial line in the sand which may be tweaked.
Last week saw some distinct performance reversion after around six months of one-way money flow from software/tech stocks into the miners, spearheaded by copper.
Hi there James and Team. Thanks for all your hard work and the great info you provide.
Hello James and Shawn,
I am looking for a supplementary copper investment to Sandfire (SFR), the only sizable pure Cu producer listed on the ASX.
What are your views of Capstone Copper (CSC)?
I do value your opinions,
John
SFR closed 13% below its 2026 high on Wednesday illustrating how miners can be volatile even within an uptrend. At MM we remain bullish towards copper in line with global electrification but a short term pullback towards the $17 area wouldn’t surprise.
BHP has already corrected ~$4 for the third time in less than 6-months, at this stage, we expect BHP to trade in a $55–$59 range over the coming weeks, with MM remaining in “buy the dip” mode on the Big Australian. Note: BHP trades ex-dividend this morning for 73c fully franked.
