Copper set one record high after another in September. The London Metal Exchange (LME) three-month contract rose to the $14,800s per ton intraday, and New York COMEX futures also set a new record.
Even in October, LME prices have mostly moved in the $14,200 to $14,600 range. AI data centers are being named as a new factor lifting copper demand.
But the September records were driven largely by uncertainty over US tariffs on refined copper and a rush of metal into the United States.
✦ Three Numbers in the Copper Market
Prices, inflation and the data center demand estimate
Let's start with how much copper data centers eat. There is an estimate that a single 1GW-class AI data center campus needs up to 50,000 tons of copper. That is a maximum, drawn from a calculation of up to 50 tons per megawatt of power equipment.
BloombergNEF projected that AI data centers will use an additional 400,000 tons of copper a year, on average, over the next decade.
✦ Who Forecasts What
S&P Global, BloombergNEF and Goldman Sachs
S&P Global's outlook is bigger still. World copper demand grows 50%, from 28 million tons in 2025 to 42 million tons in 2040, with supply about 10 million tons short.
S&P Global sees the biggest share of demand growth through 2040 coming from existing economic activity and electrification, with AI data centers as an important new axis of demand.
Vice Chairman Daniel Yergin said, in essence, that electrification is the fundamental driver of demand. BloombergNEF calculated a shortfall of 6 million tons by 2035, with supply at 29 million tons and demand at 35 million.
✦ The Supply Side in Numbers
First half and second quarter of this year
The supply side is not healthy either. By the International Copper Study Group's count, world mine output fell 1.1% in the first half of this year, and Chile, the world's largest producer, fell 6.6%.
Freeport's Grasberg mine in Indonesia is still recovering from its September 2025 accident, so Freeport's copper production also fell 18.2% in the second quarter. The refined copper market, however, showed a surplus in the first half.
Still, production of copper concentrate, a feedstock made by concentrating mined ore before smelting, has fallen, so smelters are finding it harder to secure raw material. It is worth keeping the two apart.
In its June outlook, Goldman Sachs sees a copper shortfall of 640,000 tons this year outside the United States and 170,000 tons next year. Its average price forecast for next year is $13,800 per ton.
On top of that, a US tariff variable overlaps. The United States has been considering phased tariffs on refined copper of 15% in 2027 and 30% in 2028.
In anticipation that tariffs may be imposed, metal has flowed into the United States, and COMEX warehouse stocks have piled up to a record-high level. On September 10, Reuters reported that the White House had not yet made a final decision.
✦ Prices and Rates
Not just copper is pushing prices
Copper spills over into prices too. According to the US Bureau of Labor Statistics, producer prices for copper wire and cable rose 17.9% in July from a year earlier.
ING's Ewa Manthey said, in essence, that how much consumers feel it depends on how much copper a product uses and how much of the cost companies pass on. It does not mean that copper prices raise consumer prices by that much right away.
The price environment is tough as well. On September 16 the Fed raised its policy rate by 0.25 percentage points to 3.75-4.00%, its first hike since 2023.
August US personal consumption expenditures (PCE) prices rose 3.4% from a year earlier, and the core measure, which excludes volatile food and energy, rose 3.0%. Brent crude closed at $100.32 per barrel on October 5.
It isn't only copper that is up; oil is high too.
Interested in copper investing? It is hard for us to invest directly in copper, so let's pay attention to the stocks below. For each stock, I'll check against the baseline of the October 2, 2026 close.
✦ Report Card: Three Copper Stocks
October 2 close. The arrow shows the change since the start of the year; the target gap uses the MarketBeat average.
Freeport-McMoRan Inc. (FCX, NYSE)
Freeport is one of the largest listed copper producers in the world. It has large mines in Arizona in the United States, in Chile and in Indonesia, and Grasberg in Indonesia is a big mine that produces copper and gold together.
Its technical strength is running, at large scale, a leaching process in which crushed ore is piled up, an acid solution is run through it to dissolve the copper, and the copper is then recovered from the solution.
Freeport closed at $72.04, up about 42% from the start of the year. Second-quarter revenue was $7.03 billion, down 7.3% from a year earlier but above expectations, and adjusted earnings per share of $0.74 beat the expected $0.62.
Even as Grasberg held production down, the copper price propped up earnings. CEO Kathleen Quirk said the Grasberg ramp-up is on track.
✦ Freeport-McMoRan: Targets vs. the October 2 Close
MarketBeat, 25 analysts
The investment point is that mine recovery and the copper price move together. BMO Capital Markets raised its target from $78 to $85 on September 29 and maintained Outperform.
The caution is that the average target of 25 analysts on MarketBeat is $73.77, only 2.4% above the baseline price. It is a sign that much of the upside is already in the price. Third-quarter results come out in October.
Southern Copper Corporation (SCCO, NYSE)
Southern Copper runs copper mines in Mexico and Peru, and its major shareholder is the Mexican mining group Grupo México. It is judged to have copper reserves among the world's largest and relatively low production costs, centered on large open-pit mines.
It also produces molybdenum, zinc and silver.
Southern Copper closed at $205.54, up about 48% from the start of the year. That is a simple price basis that does not reflect stock dividends. Second-quarter revenue was $4.29 billion, up 40.6%, and net income was $1.67 billion, up 71.6%, both records.
Copper production fell 3.5%, but the company raised its production guidance for this year to 917,000 tons.
✦ Southern Copper: Targets vs. the October 2 Close
MarketBeat, 15 analysts (Reduce); the S&P Global aggregate average is marked in purple
Yet Wall Street's eyes are cold. On MarketBeat, Reduce is the leading opinion among 15 analysts, and the average target of $146.84 is 28.6% below the baseline price. Even the highest target, $175.89, falls short of the baseline price.
The S&P Global aggregate puts the average higher, at $171.44, but that is still below the baseline price. The gap between record results and a stock that has run ahead is the caution for this one.
Teck Resources Limited (TECK, NYSE)
Teck is a mining company headquartered in Canada that mines copper and zinc. It sold its coal business in 2024 and focused on base metals such as copper and zinc, and the ramp-up of the Quebrada Blanca (QB) mine in Chile is its core growth driver.
Teck closed at $68.56, up about 43% from the start of the year. Second-quarter earnings per share of $1.35 well beat the expected $0.95, and revenue rose 78.2% from a year earlier.
Because it mines copper and zinc together, it is benefiting from copper's growing share.
✦ Teck Resources: Targets vs. the October 2 Close
MarketBeat, 13 analysts (6 Buy, 7 Hold)
On MarketBeat, 13 analysts split into 6 Buy and 7 Hold, so the opinion is Hold. The average target of $62.25 is 9.2% below the baseline price, and the highest target, $68, is almost the same as the baseline price.
Compared with a stock that has already risen, Wall Street is on the cautious side.
What Can Korean Investors Look At?
In Korea, Poongsan Corporation (103140) comes up.
It makes copper and copper-alloy products (a business known in Korea as shindong) and defense products such as ammunition, and copper prices are linked to its selling prices for the copper products to a large degree.
However, the defense share is large, so it doesn't move on copper prices alone. This year's share price has also been negative, unlike the copper rally.
If you want to follow the copper price itself, investing in the TIGER Physical Copper ETF (구리실물, 160580), which tracks the S&P GSCI Cash Copper Index and invests in physical-copper warehouse receipts, would be more suitable.
However, watch out, because it is exposed to currency risk.
This isn't investment advice. You know that, right? Protect your hard-earned money yourself.
Well then, shall we begin today's adventure?
✦ Related Posts
- February 2026 Crushed Software Stocks: 5 Picks from Reddit
- Jobs Shock, Yet the Nasdaq Hits a Record? AI Bubble, Rates, and Oil in One Read
- Expert-Recommended AI Semiconductor Stocks for October 2026: Nvidia, Broadcom, TSMC. Should You Buy Now?
한국어 버전: AI가 구리를 다 먹어치운다고? 구리가격 사상 최고가 돌파
No comments:
Post a Comment