How Copper Stocks Are Shaping Up in 2023
Key takeaways
- Copper prices have fluctuated wildly in the last 12 months
- Copper stocks have been a mixed picture, but many companies mine other commodities to reduce reliance on one material
- Merger talks in the sector have left the market uncertain this year, but copper is a much-needed resource for renewables and EVs
Copper is one of the most widely used metals in the world, but it’s been the victim of market fluctuations and economic headwinds this year. Analysts aren’t worried though, as copper has a big part to play in the upcoming renewable energy transition. Let’s dive into how the copper market looks this year and who the leading companies are.
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What’s happening in the copper industry?
The price of copper has been wobbly in 2023, thanks to fears of a slowdown in demand from China and elevated inventory levels, before an even more chaotic 2022 due to prices swinging wildly from Russia’s invasion of Ukraine.
Currently, the price of copper is $3.73 per pound, with Trading Economics predicting it to trade at $3.54 per pound in 12 months’ time. It’s not the rosiest outlook, but copper has a potentially huge part to play in the renewable energy transition thanks to being a highly conductive material.
It’s used in power cables, EVs and main generators, with the International Energy Agency predicting copper’s demand to double by 2030 as the clean energy transition gains traction.
The key players in copper
As copper price has been on a rollercoaster, the companies whose fates are closely tied to the raw material have seen turbulence too. American copper mining company Freeport-McMoRan is down 7.73% in 2023. Australian-based BHP mines many different materials and has a market cap of $148.7 billion, but is also down 5% this year thanks to some poor earnings reports of late.
Teck Resources, a Canadian mining company, has fared better than its peers. With close to a 19% increase in its share price in 2023, it’s down to rival Glencore in talks to purchase the firm. As for Glencore’s performance, it’s risen 35% in a five-year period.
The Russell 1000 Index has dropped 8% in 2023, while the Global X Copper Miners ETF has fallen 13% in the last year, which may tempt some traders to buy now ahead of a rise in copper’s value.
The bottom line
With copper’s future central role in renewable energy and EVs, the price downturn is predicted to be a short-term outlook rather than a sustained trend. There’s a lot of uncertainty in the market at the moment due to merger talks and macroeconomic factors affecting the price, but the long-term future of copper and its role in clean tech shouldn’t be ignored by investors.
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