A Penny for Your Portfolio? Copper Stocks Gain as Supplies Sink to New Lows
Key takeaways
- Copper supplies have fallen to fresh lows across the world
- Copper ETFs have seen modest increases in 2023 as a result of the shortage
- Mining companies like Southern Copper, Teck Resources and Freeport-McMoRan have all made stock gains in 2023
After a tumultuous year for precious metals as supply and demand went bonkers after the pandemic, copper is having a bit of a moment as stores of the metal sink to lows not seen in 15 years. As a result, it could be a good time to give copper ETFs and mining companies another look. Here’s the lowdown.
Invest in precious metals using a nifty AI algorithm with Q.ai’s Precious Metals Kit, which offers a diversified basket of ETFs to help you build wealth without the upfront work. The AI does the heavy lifting with the data and predicts where the upside might materialize to help ensure your investment is always working hard.
Download Q.ai today for access to AI-powered investment strategies.
What’s happening in the copper market?
At the London Metal Exchange (LME), copper stocks have plunged from over 100,000 tonnes to just 77,000 in the last few weeks — despite almost 30,000 tonnes arriving in that period. In the U.S. the CME Group and China’s Shanghai Futures Exchange (ShFE) have a combined 165,000 tonnes worth of copper stores.
Global copper stocks have now declined by over 45,000 tonnes, which is the lowest level since 2008. In short, global stores of copper are down across the world. What does this mean? The price of copper increases, driving up the copper stocks market’s value.
How to invest in copper stocks
For broader diversification, exchange-traded funds (ETFs) are a good option. The United States Copper Index Fund has delivered a small increase of 2.54% this year, while the Global X Copper Miners ETF has seen a healthy 6.52% rise. For an even broader focus on metals, the SPDR S&P Metals & Mining ETF has increased by 1.16% in 2023.
Another way to invest in the copper market is through copper mining companies. Southern Copper has had a great run in 2023, seeing a 19% lift in its share price to reach highs of $73.40. The copper mining conglomerate has grown its earnings per share at 27% annually over the last three years, with a total shareholder return at 34% in the last year. Some other major copper mining companies are Freeport-McMoRan, Teck Resources and BHP.
The bottom line
Copper and other precious metals can fluctuate over time as demand swells and recedes, but now is one of those times when copper is a hot commodity as supplies hit fresh lows. There are plenty of ways to invest in the market, but a diversified portfolio is always the best approach so you’re not overexposed to any downside.
Another precious metal that’s been on the investing radar this year is gold, which is the focus of Q.ai’s Gold Rush Kit. It’s all powered by AI, which sifts through massive amounts of data to predict which gold mining companies are set to perform well. It then adjusts your investment in the Kit’s holdings, designed to keep you one move ahead.
Download Q.ai today for access to AI-powered investment strategies.
