Copper stocks have gone ballistic.
And the run may be far from over, as Wall Street gets even more bullish.
All thanks to severe supply-demand issues.
According to Bank of America analysts, “Copper is increasingly ‘dancing to its own tune’, with prices of the red metal forecast to reach about $12,000 per tonne by 2026. The pronounced lack of new mine projects has begun to bite, constraining refined copper production and spotlighting years of underinvestment in copper exploration and development.”
Analysts 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.
