Commodities: Copper
Our concern towards the WIRE ETF is how hard it’s run compared to the underlying industrial metal. For example, Cu is up +70% from its sharp sell-off last April, yet the WIRE ETF has gained more than +190% as fund managers scrambled for exposure to the coveted industrial metal. Similarly, over the same period, Sandfire (SFR) has surged +165%.
It feels like commodities are taking turns to rally, and yesterday copper really came to the fore, popping above $US14,000 for the first time. Thursday’s intraday move was the biggest since 2009, when China was rolling out massive stimulus measures in the aftermath of the great financial crisis.
Last week, EVN delivered a strong December quarterly, with the gold/copper producer cutting its all-in sustaining cost (AISC) forecast for the full year by ~5.5% to $A1640-1760 – remember this morning gold is trading around $A7,300/oz. The company maintained FY26 production guidance which given the price of metals will drive very strong cash flow.
The stampede by investors into copper stocks is comparable to that of gold in places. The panic buying in recent times is by the Global X ETF (WIRE), which tracks copper miners, has attracted more inflows since January than the whole of 2025, marking its strongest start to the year on record.
Copper declined from a near record overnight, despite a weaker US dollar. Copper’s rally, which pushed prices to a fresh record earlier this month, is now starting to test demand. In China, metals markets have slowed ahead of the Lunar New Year, a period when inventories typically build, and downstream buyers reassess purchasing plans for the year ahead.
A key shift underpinning the rally by industrial metals is that commodities such as copper and aluminium are no longer trading purely as short-cycle economic plays. Once closely tied to the pace of global growth, they are increasingly viewed as structural investments, driven by the energy transition and the build-out of AI infrastructure.
SFR -1.34%: delivered a mixed December-quarter update, with production slightly softer but earnings materially stronger.
Last week copper surged to new highs against the ongoing backdrop of increased demand for the industrial metal from AI and global electrification – impressive considering the lacklustre demand from China. We believe a fresh copper bull cycle is being born that’s likely to fuel ongoing M&A in the sector. To put the numbers into perspective S&P Global are forecasting global copper demand will increase by 50% by 2040 with supply expected to fall short of meeting this demand hence the likes of RIO and Glencore considering a merger and BHPs failed attempt to buy Anglo American.
On Friday copper rose towards $US12,000 participating in a broad base metals rally. Any uptick towards the “AI Trade” and global electrification is helping push the copper price higher but after surging ~50% from its 2025 low we are conscious that this is becoming an increasingly crowded space although the trend is up for good reason.
On Friday copper slid the most in two months, retreating from a fresh record high, as a selloff in US technology shares renewed concern about demand for the metal. Copper is the front facing metal in the AI space, tending to be most impacted whenever you have a big move up or down in the “AI Trade”.
