Copper Concept Stock Investment Map: Why Are Copper Stocks Worth Watching in 2024?

Copper has recently become a hot topic in the investment circle. Freeport-McMoRan (FCX), the world’s leading copper miner, has surged 30% in just a month and a half, while international copper prices have increased by 17% during the same period. What investment logic is hidden behind these data?

Why Are Copper Concept Stocks Rising? Three Core Drivers

Tight Supply Side
Global copper mining capital expenditures have remained subdued over the past decade, leading to a much slower growth in new capacity than expected. This means that the supply increase of copper will be limited in the long term, tilting pricing power toward upstream companies.

Strong Demand Side
Driven by carbon neutrality goals, global investments in electricity and power grids maintain high growth, with demand for copper as a conductive material continuously rising. Meanwhile, the global AI computing race is heating up, with data centers, servers, cables, and other applications creating huge incremental demand for copper.

Economic Cycle Resonance
Currently, the global economy is in a recovery cycle, with commodities generally thriving. Copper prices and copper concept stocks often accurately reflect the economic cycle trend and are difficult to manipulate artificially.

The combination of these three forces makes copper concept stocks a sector with investment value at present.

Full View of the Copper Industry Chain: Who Profits, Who Gets Trapped

From mines to end-use applications, copper goes through three main segments, each with very different profit logic.

Upstream Mining: Copper Mining Companies (Positively Correlated with Copper Prices)
This is the top segment of the industry chain, with copper mines and refined copper as main products. Rising copper prices directly boost profits, while falling prices put pressure on performance. The top ten global copper mining companies include:

The upstream industry is highly concentrated, with stable competitive patterns and relatively broad profit margins. This is the core target for copper concept stock investments.

Midstream Smelting: Low-Profit Processing Sector
Smelting companies extract refined copper from mines, mainly earning revenue from smelting processing fees (TC value), rather than copper price fluctuations. Copper price movements have little impact on them—when copper is expensive, raw material costs rise; when copper is cheap, processing fees are squeezed. Currently, industry processing fees are low, and smelting companies have weak profitability, so participation is not recommended.

Downstream Processing and Applications: Copper as Cost Input
Downstream companies such as wire, cable, and foil manufacturers use copper as raw material. Rising copper prices mean higher costs, squeezing profit margins. Taiwanese copper concept stocks like First Copper (2009), HuaRong (1608), and DaYa (1609) are in this segment, and copper price increases are negative for them.

Relationship Between Copper Stocks and Copper Prices: Why Do They Move in Sync?

The answer is simple: the main product of copper mining companies is copper, so fluctuations in copper prices directly determine their performance.

Comparing copper mining ETFs (code: COPX) with LME copper prices shows that their trends are basically synchronized. Every 1% increase in copper prices significantly improves the profit margins of copper miners. Conversely, the same applies when prices fall.

Because of this high correlation, investors only need to monitor copper price trends to grasp the direction of copper concept stocks.

Summary of 5 Leading Copper Concept Stocks

Top Global Copper Miners

Freeport-McMoRan (FCX.N)
Founded in 1987, focused on copper, gold, molybdenum mining, headquartered in Arizona, USA. As the world’s largest copper miner, FCX has the purest business model, with the highest copper mine output globally, making it an absolute leader in copper concept stocks. This stock is most sensitive to copper prices.

Glencore (GLEN.L)
Founded in 1974, Swiss mining giant involved in metals, minerals, energy, and agricultural products. Although not purely a copper company, it benefits from the mining cycle. Diversified operations bring lower risk.

BHP (BHP.AX)
Australian mining veteran established in 1885, with businesses including copper, iron ore, coal, silver, lead, zinc, etc. Copper is just one part of its portfolio, but its scale is significant. Compared to FCX, BHP faces more diversified commodity cycle risks.

Taiwan Copper Concept Stocks

First Copper (2009)
Founded in 1969, an established copper company specializing in copper and copper alloy sheets, supplying semiconductors, automotive, and electronics industries. Positioned downstream in the industry chain, rising copper prices will increase raw material costs.

HuaRong (1608)
Founded in 1956, one of Taiwan’s top three wire and cable manufacturers. Also downstream processing, with copper price trends inversely affecting its profitability.

Can You Still Buy Copper Concept Stocks in 2024?

Short-term Risk Warning
Copper prices and copper stocks have surged rapidly, with considerable gains in the short term, indicating a potential pullback. Investors rushing to chase gains should pay attention to timing and wait for technical signals before entering.

Medium-Long Term Opportunity Outlook
The supply and demand outlook for copper remains positive. Policies promoting carbon neutrality boost power grid investments, and the global AI computing race increases demand for electricity and cables, supporting copper prices. Future supply growth is limited, but demand continues to grow, so the overall trend for copper concept stocks is upward.

Strategy Suggestions
Given the significant short-term gains, the best entry point is to wait for a correction combined with technical signals. Holding copper concept stocks during the global economic upcycle is advisable, and once signs of economic downturn appear, timely profit-taking is necessary.

Core Points for Investing in Copper Concept Stocks

In stock selection, prioritize upstream mining companies (like FCX, Glencore, BHP), as they directly benefit from rising copper prices. Avoid over-participating in midstream smelting companies unless processing fees show clear improvement.

In risk management, remember that copper is a commodity and will fluctuate with the global economic cycle. Factors such as Federal Reserve policies, global economic growth, and geopolitical issues will influence copper prices. Buy and hold during uptrends, and exit decisively when downward signals appear.

The core advantage of investing in copper concept stocks is the clear logic—grasp the economic cycle, and you grasp the trend of copper concept stocks. Compared to many manipulated targets, copper prices and stock prices more truly reflect market expectations.