As copper futures continue to trade near record highs, a significant development has emerged from China. Major copper smelters are contemplating output reductions. This decision, underscored by the absence of price guidance for the second quarter, signals a potential tightening in the market for refined copper. In light of these dynamics, investors are keenly looking at stocks to buy as copper prices skyrocket, seeking opportunities in a market poised for further growth.
Here are three stocks to buy as copper prices skyrocket.
Freeport-McMoRan (FCX)
Headquartered in Arizona, Freeport-McMoRan (NYSE:FCX) is a leading international mining company specializing in copper, gold and molybdenum extraction. Freeport-McMoRan, one of the world’s largest publicly traded copper producers, focuses on sustainable, cost-effective mining practices. It is known for operating large, long-lived, geographically diverse assets with significant proven reserves,
Freeport stock surged in recent months thanks to the challenges of copper supply. In the recent earnings call, Kathleen Quirk, the president of Freeport-McMoRan, said “supply shortfalls throughout the industry for some significant mines,” contributed to higher prices.
Surging demand for copper and rising gold prices are enhancing the financial outlook for Freeport-McMoRan. The company anticipates selling 4.1 billion pounds of copper, 2 million ounces of gold and 85 million pounds of molybdenum in 2024. While the copper sales projection mirrors 2023 figures, the company expects to surpass its previous year’s gold and molybdenum sales.
Industrial Info Resources has identified nearly $13 billion in active and planned Freeport-McMoRan projects worldwide. Around $3 billion of these investments are located in the United States, signaling a significant commitment to expanding its mining operations. This makes FCX one of the top copper stocks to buy as prices continue to rise.
BHP (BHP)
BHP (NYSE:BHP), headquartered in Melbourne, Australia, operates a diverse portfolio of assets globally. It focuses on iron ore, copper, coal, petroleum and potash. Citi recently upgraded the stock from “neutral” to “buy,” signaling strong growth prospects for the company amidst recent market fluctuations.
The impressive performance of copper prices reaching an 11-month high due to looming concerns of potential Chinese smelter production cuts fuels Citi’s optimism. Such cuts could lead to tighter supply in the market. BHP, a significant copper producer, is expected to gain substantially from this scenario.
Citi’s move, coupled with favorable copper market dynamics, has sparked a renewed investor interest in BHP stock to consider for 2024. Analysts argue that BHP is well-positioned to capitalize on improving market conditions. This could lead to enhanced profitability and shareholder value.
Southern Copper (SCCO)
Southern Copper (NYSE:SCCO) stock recently reached an all-time high after an extremely strong rally in prices in March. It’s a solid candidate for stocks to buy as copper prices skyrocket. The company is one of the largest global integrated copper producers. It specializes in mining, exploring, smelting and refining copper and other minerals.
Southern Copper operates mines and processing facilities in Mexico, Peru and Chile. It boasts significant copper reserves, making it a key player in the global copper industry. Southern Copper stock recently received a boost after Jefferies analysts upgraded their rating from Hold to Buy while also revising the price target upward from $91 to $130.
The optimistic move reflects Southern Copper’s bright future prospects following a refreshed analysis from the investment bank. This yielded an updated price deck and refined production estimates for Southern Copper.
On the date of publication, Shane Neagle did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
