These Copper Mining Stocks Are Poised to Benefit from the Copper Supply Crisis

Published on: Apr 16, 2024
Author: Amy Liu

Copper’s crucial role in electric vehicle batteries and renewable energy solutions has increased the demand for copper. Warnings about potential copper supply shortages in the coming years have been issued due to the lack of new mines and expansions, particularly in South America. McKinsey & Company predicts a copper supply deficit of 6.5 million tons by 2031 compared to demand forecasts.

Due to the challenge of supply and growing demand, copper prices have experienced a surge. Analysts from Bank of America and Citigroup forecast a significant increase in copper prices in the future. Bank of America specially expects copper prices to reach $10,250 per ton by the fourth quarter of this year. The following copper mining stocks are well-positioned to benefit from the rising prices of the metal:

BHP Group

BHP Group (BHP) is one of the world’s largest mining companies, operating multiple copper mines. The company is set to surpass Codelco this year as the largest global copper producer.

Last quarter, BHP Group achieved a record high annual copper production from its mines. While the company’s stock has not performed well in 2024, analysts have an average target price of $64.20 for the stock, representing a 9.7% upside from current levels.

Southern Copper Corporation

Southern Copper (SCCO) is known for its rich copper reserves and substantial production. SCCO has a sound financial position, high profitability, and efficient operations. The company focuses on maintaining low production costs while maximizing output, leading to better margins compared to peers. Southern Copper has ambitious plans to increase production capacity, including extending the life of existing mines and developing new mining projects.

In 2024, SCCO’s stock outperformed the market, rising by 36%. Analysts are optimistic about this copper mining stock and have a target price of $115, representing a 40% short-term upside potential.

Base Metals Copper Mining Personal Finance