Up 75% from 52-week Lows, This Copper Mining Stock Is Stronger Than Ever

Published on: Jun 17, 2024
Author: Caroline Kong

Copper prices fell to their lowest in nearly eight weeks On Monday (17 June) as data from China showed a bleak outlook for copper demand. Prior to this, copper prices had generally been trending upwards recently. As of early June, the LME benchmark copper price stood at around $10,139 per metric tonne, up 7.1% from the previous month and 23.4% from the same period last year.

Copper prices have risen this year partly because of tightening supply, which has been tightened by the closure of the Cobre copper mine in Panama, which accounts for a large part of global copper production.

In addition, production at other major mines, such as those in Chile and Zambia, have exacerbated supply constraints. And despite the uncertainty surrounding the Chinese economy, particularly the real estate sector, the overall global outlook is improving. Investments in infrastructure and the ongoing energy transition are boosting demand for copper, and this positive sentiment has fuelled the spike in copper prices to some extent.

As copper prices have soared, copper mining stocks on the TSX have begun to receive more investor attention. In the near term, as copper prices pull back, investors may consider buying certain copper stocks.

Ero Copper

Canadian copper miner Ero Copper (TSX:ERO) has seen its share price climb this year, driven by rising copper prices. But for real, the main driver of the share price has been the company’s increasingly strong fundamentals.

Ero Copper’s Tucumã project in Brazil is more than 85% physically complete and is on track to produce copper for the first time in the second half of 2024. This milestone is a significant boost to investor confidence, as it is expected to deliver future revenue growth and expand the company’s production capacity.

The company reported financial results for the first quarter of 2024 that showed strong earnings and solid cash flow. These positive financial metrics could be one of the reasons for the share price increase, as it indicates that the company is in good operational and financial health.

This is coupled with rising copper prices due to supply constraints and growing demand from the green energy industry. This broad market trend favours copper producers like Ero Copper, solidifying its revenue outlook. Recent reports indicate that investors are becoming more optimistic about the company’s future prospects, which is being reflected in the upward trend in the stock price.

As copper prices continue to move higher, Ero Copper stock could be one of the picks to consider in a growth portfolio. With improving financials and increasing copper production, especially with the stock price up 75% from its 52-week low, now could be a good time to buy the stock.

Base Metals Canadian Stocks Copper Value Stocks