Copper prices have trended above $5.00 per pound since last week, a level last seen in May 2024. Copper futures for May delivery closed at $5.09 yesterday after hitting a high of $5.18. Prices are being driven by concerns over U.S. tariffs and stimulus measures in China. The metal has had a good run so far this year, notching a gain of 27.9%. It remains to be seen whether the commodity can break its record high of $5.199 per pound set on May 20, 2024.
Amid this strong momentum in copper prices, investors may consider companies like BHP Group BHP, Southern Copper SCCO, Freeport-McMoRan Inc. FCX, Teck Resources TECK and Amerigo Resources ARREF, which are expected to benefit from this rally. Their growth plans make them attractive investment options.
Factors Driving Copper Prices
Tariff Concerns: U.S. President Trump signed an executive order last month to investigate copper imports, citing national security risks from the growing reliance on foreign sources. This has fueled speculation about a 25% tariff. This, in turn, triggered a preemptive scramble among traders to pay higher premiums and expedite shipments to the United States. This rush has tightened supply elsewhere, leading to a spike in prices.
Supply Constraints: The copper market is grappling with inherent supply constraints from prolonged underinvestment in new mining projects and limitations in refining capacity. The extended lead times involved in bringing new mines online, along with the capital-intensive nature of such projects, have resulted in a notable shortage of upcoming copper supply. While demand has been strong, there will be an eventual deficit in metal supply, leading to a situation that will bolster metal prices.
Electrification & Technological Demand: The surging demand for electric vehicles is expected to be a significant growth driver for copper. Moreover, the transition to renewable energy sources, such as solar and wind power, necessitates substantial copper usage. Artificial intelligence (AI), requiring extensive data centers and high-performance computing infrastructure, is another major consumer of copper.
China's Economic Recovery: China’s GDP grew by a seasonally adjusted 1.6% in the fourth quarter of 2024, higher than the 1.3% for the third quarter. It marked the strongest quarterly increase since the first quarter of 2023. China’s GDP growth target has been set at 4.6% for 2025. China’s government is implementing stimulus measures to boost domestic consumption and support the economy. This is expected to boost copper demand.
Copper’s Long-Term View Intact
The long-term outlook for copper remains strong, driven by consistent growth in traditional sectors like construction and manufacturing, energy transition (renewables and electric vehicles) and the rise of digital technologies (AI and data centers). Given the supply limitations, this demand surge is expected to push prices higher.
5 Copper Stocks to Watch
We suggest investors keep an eye on these five copper-mining stocks that we have handpicked. These stocks have a Zacks Rank #3 (Hold) and have outperformed the S&P 500’s decline of 2.3%. This is shown in the chart below.
These stocks are anticipated to carry the momentum forward, backed by their earnings growth projections.
Zacks Investment Research
Image Source: Zacks Investment Research
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BHP Group: The company expects copper production of 1,845-2,045 kt in fiscal 2025, following a 15-year high production of 1,865 kt in fiscal 2024. In Chile, the company has seven key projects, which can grow copper production to average 1.4 Mtpa through the 2030s. BHP is investing in its 100% owned Copper South Australia asset, focusing on all three operations.
The company recently announced smelter and refinery expansion at Olympic Dam, which is expected to take BHP’s copper production in South Australia from 322,000 tons in fiscal 2024 to more than 500,000 tons by early 2030s and 650,000 tons by mid-2030s. BHP and Lundin Mining recently completed the acquisition of Filo Corp and formed a joint venture, Vicuña Corp., to hold the Filo del Sol and Josemaria copper projects. This will help advance one of the most significant copper discoveries globally in recent decades.
BHP also has a 45% interest in the Resolution Copper Project in the United States, one of the largest undeveloped copper projects in the world. BHP expects these projects to deliver more than 2 Mtpa of attributable copper production by the mid-2030s. Efforts to make operations more efficient by adopting technology will continue to aid in reducing costs. BHP’s focus on lowering debt is also commendable.
The Zacks Consensus Estimate for BHP’s fiscal 2025 earnings suggests year-over-year growth of 3.6%. The estimate has moved up 0.5% in the past 30 days. The stock has gained 1% year to date.
Southern Copper: The company has the largest copper reserve in the industry and operates world-class assets in investment-grade countries, such as Mexico and Peru. SCCO expects copper production of 967,000 tons for 2025, suggesting no change from that registered in 2024. This will be supported by higher production in Peru and production from the new Buenavista zinc concentrator.
The company’s capital investment program for this decade exceeds $15 billion and includes investments at the Buenavista Zinc, Pilares, El Pilar and El Arco projects in Mexico, and the Tia Maria, Los Chancas and Michiquillay projects in Peru.
SCCO continues to build its presence in Peru, as the country is the second-largest producer of copper. Southern Copper’s Michiquillay is expected to become one of Peru's largest copper mines and will produce 225,000 tons of copper per year (along with by-products of molybdenum, gold and silver) for an expected mine life of more than 25 years. Production is scheduled to start by 2032. Given its constant commitment to increasing low-cost production and growth investments, SCCO is well-poised to continue delivering an enhanced performance.
The Zacks Consensus Estimate for the Phoenix, AZ-based company’s fiscal 2025 earnings indicates year-over-year growth of 6.9%. The estimate has moved up 1.3% over the past 30 days. SCCO has a long-term estimated earnings growth rate of 11%. It has a trailing four-quarter earnings surprise of 7.9%, on average. SCCO shares have gained 9.3% so far this year.
Freeport-McMoRan: The company's strategy to expand reserves through exploration near existing mines is expected to fuel growth. FCX is implementing the latest technologies and data analytics in leaching processes across its North America and South America operations. The leach initiative provided an approximate 50% increase in incremental copper in 2024 compared with 2023 in North America.
FCX is targeting an annual run rate of 300 million pounds by this year-end and a long-term target of 800 million pounds by 2030. Freeport has a policy of distributing 50% of the available cash flows to shareholders and the balance to reduce debt and make investments in growth projects.
Its organic project pipeline containing Kucing Liar/Grasberg District, Bagdad 2X, El Abra expansion and Lone Star sulfide expansions remains strong. Kucing Liar expansion has an expected production of 7 billion pounds of copper through 2041. The Baghdad expansion is expected to add incremental production of 200-250 million pounds of copper annually. El Abra expansion with a potential start-up in 2033 is expected to add 750 million pounds of copper per year.
The Zacks Consensus Estimate for FCX’s earnings for fiscal 2025 indicates year-over-year growth of 10.1%. The company has a trailing four-quarter earnings surprise of 15.2%, on average. It has a long-term estimated earnings growth rate of 26.6%. The Phoenix, AZ-based company has gained 9.3% year to date.
Teck Resources: The company’s copper production was 446,000 tons in 2024, which marked a 50.7% year-over-year increase due to the ramp-up of QB, which achieved design throughput rates by the end of the year. The same for 2025 is projected at 490,000-565,000 tons, reflecting the ramp-up at QB, and higher production at Highland Valley Copper and Carmen de Andacollo. Highland Valley Copper production is expected to increase significantly in 2025 as mining continues in the Lornex pit, releasing ore that is both higher grade (more metal) and softer (higher mill throughput). The sanction decision for the Zafranal copper-gold project is expected in late 2025.
Zafranal has an expected mine life of 19 years and will produce copper-gold concentrates through an open-pit mining and conventional concentration process. The mine and concentrator are expected to produce an average of 126,000 tons of copper contained in the concentrate during its first five years of production.
Also, the Highland Valley Mine Life Extension is expected to add 17 years to the mine’s life. The San Nicolas project’s annual estimated production (on a 100% basis) is 63,000 tons of copper and 147,000 tons of zinc in the first five years. The feasibility study and execution strategy are progressing toward a potential sanction decision in the second half of this year. The company expects to increase copper production to 800,000 tons before the end of this decade.
The Zacks Consensus Estimate for Vancouver, Canada-based Teck Resources’ 2025 earnings suggests a year-over-year upsurge of 78%. It has a trailing four-quarter earnings surprise of 18.4%, on average. It has a long-term estimated earnings growth rate of 51.8%. The TECK stock has gained 3.4% year to date.
Amerigo Resources: In 2024, the MVC operations produced 64.6 million pounds of copper, delivering a 12% year-over-year improvement and 4% growth from ARREF’s guidance. Copper deliveries reached a record 65 million pounds. Net income for 2024 was $19.2 million, a solid improvement from $3.4 million in 2023. For 2025, Amerigo projects production of 62.9 million pounds of copper and 1.3 million pounds of molybdenum, marking the fifth year of increased production guidance.
Backed by its healthy cash balances, minimal debt and robust financial performance, the company continues its capital return strategy that was initiated in September 2021. In 2024, Amerigo returned $21.2 million to shareholders (including both quarterly and performance dividends). Notably, this was the first year the company employed all the elements of the strategy — quarterly dividends, performance dividends and share buybacks. ARREF is planning to end 2025 with a debt-free balance sheet.
The Zacks Consensus Estimate for Vancouver, Canada-based Amerigo Resources’ earnings for 2025 indicates a year-over-year surge of 75%. The estimate has been unchanged over the past 30 days. ARREF has a long-term estimated earnings growth rate of 20%. The stock has gained 24.4% year to date.
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