Copper prices may have already exploded higher.
But it could race even higher.
According to Mining.com, “Disruptions at major mines have left smelters paying historically steep prices to get hold of mined ore, and Chinese plants — which produce more than half of the world’s refined copper — are moving closer to implementing a joint output cut in response. At the same time, tentative signs of a return to growth in the global manufacturing sector are raising hopes that tightening market conditions could help power copper to new records.”
Analysts over at Citi say copper prices could run even higher, averaging about $10,000 per metric ton this year. UBS analysts also say the rally is just the beginning, noting that copper is undersupplied and that investors should stay long the metal. The firm also believes demand will expand by over 3% this year, which could push copper prices to $10,500 per metric ton.
Analysts are also bullish on copper thanks to artificial intelligence.
As noted by CNBC, “Copper is used in data centers for power cables, electrical connectors, power strips and more, Jefferies noted. It estimates that global copper demand by data centers will increase from 239 kt (thousand tons) in 2023 to at least 450 kt per annum in 2030.”
While investors can always jump into copper stocks, like Freeport-McMoRan (FCX), Southern Copper (SCCO), and Taseko Mines (TGB), there are also ETFs such as the United States Copper Fund (CPER) – which last traded at $26.71. With an expense ratio of 0.97%, the CPER ETF consists of listed copper futures contracts and other copper-related futures and may consist of forwards and swap contracts.
Another copper ETF to keep an eye on is Global X Copper Miners ETF (COPX). With an expense ratio of 0.65%, the ETF provides results that correspond to the Solactive Global Copper Miners Total Return Index. Top holdings of the COPX ETF include Freeport-McMoRan, Lundin Mining (LUNMF), Ivanhoe Mines (IVPAF), Southern Copper (SCCO), and Teck Resources (TECK).