Commodities: Copper
Sandfire has been a great illustration of the cyclical and volatile nature of commodity stocks having fallen more than 30% from its January high after getting too excited on the upside from a valuation perspective when it tested $22.
Freeport had a good session overnight gaining +4.4%, following the copper price higher, recovering from some recent weakness after the company reduced 2026 copper and gold sales forecasts because of operational delays at the Grasberg mine in Indonesia — specifically wet ore conditions at Grasberg Block Cave that are bottlenecking material handling infrastructure.
At the smaller end of the copper spectrum is A1M with a market cap of ~$520m. Aic are ramping up operations at their flagship Eloise mine and showing very strong operational execution. They also have good exploration prospects, along with a fully funded plant expansion at Eloise, targeting 20ktpa Cu by FY28.
Copper punched higher last week as the backdrop around the war improved demonstrating to us that the path of least resistance remains on the upside. Local copper stocks were firm with Sandfire (+7.3%) although they remain well off their panic like January highs, but with the industrial metal offering a strong tailwind further gains look highly likely.
Copper (Cu) prices surged more than 5% overnight with a retest of this years highs feeling very likely in 2026. The software stocks are showing us that the AI build-out is very real, and along with global electrification, Cu is at the forefront of the materials required for this next chapter of global economic revolution.
The worlds largest miner is rarely far away from MM’s notes, and we last looked at it a few months ago, Here after its solid March quarter trading update. With iron ore trading above $US110, and Cu looking increasingly strong, BHP is in a great position to surprise on the upside, and we see no reason to reduce our position (s) at this stage.
Sandfire corrected over 30% from its late January high as investors took profit before, and after the Iran war broke out. The main issue with this copper miner is its valuation, after it became the “go to” pure Cu play on the ASX after BHP bought OZ Minerals three years ago. Even in today’s environment, where virtually all analysts are positive on the industrial metal, there is mixed opinions around SFR
Copper has been one of the standout commodities through 2025/26, rallying to record highs early in this year before pulling back on Iran-related economic uncertainty, with prices stabilising around $US13,000/MT—only modestly below pre-conflict levels.
Hi Gents, forgive me if you have already answered this through the week, but could we hear your views on any material implications of this article’s outcome.
Encouragingly copper has started to consolidate even as news from the Middle East fails to meet expectations over recent weeks – a market that doesn’t fall on “bad” news delivers a bullish read through.
