3 Copper Stocks to Own Amid Robust Demand


  • With increasing demand for cleaner technology and products, copper is the commodity to own. 
  • Rio Tinto (RIO): The firm reported stronger-than-expected earnings in February.
  • Freeport-McMoRan (FCX): It received a boost as Indonesia is set to extend its copper mining permit.
  • BHP (BHP): The leading resources company makes significant strides through partnerships and mega M&A deals.
Copper Stocks to Buy - 3 Copper Stocks to Own Amid Robust Demand

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Copper prices have surged past the $9,000 per ton mark. This highlights the solid demand for electric vehicles (EVs), data centers and renewable energy solutions. This rally underscores the importance of identifying the right copper stocks to buy.

With no substitute for copper in these technologies, its importance is only set to increase. Global economies are shifting toward cleaner energy sources and high-tech manufacturing. This is particularly evident in China, where the government is prioritizing growth. Such clean energy sectors include EVs, batteries and solar panels.

Moreover, copper’s price surge has been exacerbated by supply disruptions. This is notable in the closure of the Cobre Panama mine operated by Canada’s First Quantum (OTCMKTS:FQVLF). The mine’s shutdown has removed a significant source of copper from the market. It had accounted for approximately 1.5% of the global copper output.

‘This is the second secular bull market that we’ve seen in copper this century, and it’s just starting now,” said Max Layton, global head of commodities research at Citi (NYSE:C). 

Let’s now take a look at the best copper stocks to buy to capitalize on this growing market trend.

Rio Tinto (RIO)

the rio tinto (RIO) logo on a building during daylight
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Rio Tinto (NYSE:RIO) is a global mining giant headquartered in the U.K., with operations spanning multiple continents.

In February, Rio Tinto reported full-year underlying earnings of $11.8 billion, a drop from the previous year’s $13.4 billion. This was primarily due to lower aluminum prices and weaker performance in its minerals division. Still, this result was easily above the consensus estimate of $11.7 billion.

Also, the company declared a final dividend that surpassed market forecasts, signaling easing inflation pressures. Rio Tinto declared a final dividend of 258.0 cents per share, an increase from 225.0 cents per share in 2022. But it was higher than the anticipated 247.0 cents per share. 

The world’s largest iron ore producer reported a 6% growth in underlying earnings within its iron ore division. That sect contributes approximately 80% of its profits. This growth in the iron ore sector notably surpassed the 2% rise in iron ore prices.

Rio Tinto offers a solid exposure to rising copper prices.

Freeport-McMoRan (FCX) 

Freeport-McMoRan Stock's Long List of Catalysts Boosts Its Buy Status
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U.S.-based Freeport-McMoRan Inc. (NYSE:FCX) is a leading international mining company specializing in copper, gold and molybdenum production. FCX operates large, geographically diverse assets with significant proven reserves, primarily in the Americas and Indonesia.

Also, the company offers even greater exposure to copper prices than Rio Tinto. Recently, Argus Research raised its price target for Freeport-McMoRan stock to $54 while maintaining a buy rating for the mining company’s shares. 

The analyst from Argus Research pointed out that Freeport-McMoRan has strengthened its financial position by selling off certain assets, leading to a more solid balance sheet. The company is also expected to benefit from the high and potentially rising prices for copper and other metals, contributing to favorable financial results.

Another positive development is related to the fact that Indonesia is set to extend copper concentrate export permits for Freeport Indonesia. So, this move could impact the global copper supply. 


Smartphone with BHP Group logo in front of BHP website. BHP stock.
Source: T. Schneider / Shutterstock

Based in Australia, BHP Group (NYSE:BHP) is a world-leading resources company that extracts and processes minerals, oil and gas. A major player in the global copper market, BHP commits to innovative practices and sustainability, aiming to supply essential resources efficiently and responsibly.

Mining companies are rushing to increase copper supply following the surge in prices. Along these lines, BHP announced recently that it is teaming up with Ivanhoe Electric (NYSEMKT:IE) to explore for copper and other important minerals.

The partnership aims to identify new sources of essential minerals that are in increasing demand. This is due to the global shift toward clean energy and the electrification of various industries. The exploration agreement is divided into two stages. 

The first phase involves project generation with the companies conducting exploratory activities. The subsequent phase could potentially lead to the establishment of joint ventures to oversee the development and operation of mining projects.

In addition to the partnership with Ivanhoe, BHP has also made a $39 billion bid for Anglo American (OTCMKTS:NGLOY) to expand its copper exposure. 

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.

Shane Neagle is fascinated by the ways in which technology is poised to disrupt investing. He specializes in fundamental analysis and growth investing.

Article printed from InvestorPlace Media, https://investorplace.com/2024/05/3-copper-stocks-to-own-amid-robust-demand/.

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