Commodities: Copper
Copper and Aluminium have surged higher over the last 12-months as the global electrification and the AI buildout gathers momentum. While MM are conscious both are becoming a consensus trade, the fundamental tailwinds are strong and we believe it’s too early to consider fading the move.
Copper, much like equities, reversed sharply higher overnight as optimism around the Middle East conflict improved sentiment toward global growth assets. The industrial metal remains heavily tied to economic activity and infrastructure demand, both of which will benefit significantly from the Strait of Hormuz reopening and energy markets stabilising.
Copper stabilised and ultimately closed higher last week as hedge funds increased their bullish bets towards the industrial metal to the highest in 21 weeks accordingly to CFTC data. Its bullish that professional traders are backing copper but ultimately its likely to lead to increased volatility down the track when they look to exit their positions.
What are your thoughts on the relatively new CPPR as an alternative way to get exposure to copper? Thanks
Hi Market Matters Team
Currently which Uranium stock do you prefer between Paladin and NexGen. I know you hold both but if you only held PDN would you switch to NXG? Also for further copper exposure would you buy CSC (Capstone)?
regards
Debbie
Even though oil remains elevated and economic fears persist copper has moved on from the US-Iran war, advancing another ~3% overnight towards its all-time high. The metal traded above $US14,000 a ton on the LME Tuesday, moving back toward Januarys record around $14,500 with the industrial metal shifting from a traditional global-growth proxy into the clearest market expression of today’s bigger structural shifts.
The ASX-traded WIRE ETF provides excellent exposure to over 40 global copper miners, including Australia. With the industrial metal advancing strongly, even with the Iran war remaining unresolved, we believe a re-rating on the upside is just a matter of time.
BHP has evolved into first and foremost a copper miner, well supported by iron ore and potash into the future. The stock still looks to have significant upside potential as investors scramble to gain exposure to copper. It would be easy to grab a profit with BHP set to break $60 for the first time today, but until we see signs that the copper euphoria is getting ahead of itself &/or could blow up, like iron ore did ~15 years ago, we believe its prudent to stay long, especially in a market that’s punishing losers and chasing winners.
For most of the 20th century, oil was the backbone of the global economy. Today, that role is quietly shifting, toward copper. As electrification and AI accelerate, copper is becoming the critical input powering everything from EVs and renewables to data centres. The demand story is compelling: EVs use ~4x more copper than traditional cars, wind and solar are copper-intensive, and hyperscale data centres require vast amounts for power, cooling and connectivity. With hyperscalers capex set to surge, AI is emerging as a major new demand driver.
