These 3 Copper Stocks are Set for a Massive Rebound
Copper stocks took a nasty hit last week after the Trump tariffs unleashed an avalanche of fear and uncertainty.
In fact, we’re now seeing new estimates indicating that copper could fall as low as $3.00 per pound. A far cry from March numbers, which had copper trading in excess of $5.00 per pound.
Indeed, fears of a global economic slowdown as a result of Trump’s trade war are justified. But I’m not so pessimistic about copper.
To be fair, there’s little certainty as to how this trade war will play out. But we do know that – even in a recessionary environment – new energy infrastructure will continue to be built in an effort to support the growing demand for electricity from the AI and cryptocurrency sectors.
And as you know, you can’t have electricity without copper. Which is why we believe that any decline in copper prices will be short lived. And we definitely don’t see it falling back to $3.00. Which is why it’s a good time to start thinking about getting some exposure to copper by buying a few copper stocks on weakness.
3 Copper Stocks for long-term Growth
The key to making a few bucks in the copper game this year can be found in domestic demand.
In other words, because of the trade war, the U.S. has taken efforts to ensure that more domestic copper demand is met with domestic supplies. Moreover, we’re now seeing the major U.S. players calling on the president to restrict exports, thereby further boosting domestic production.
But it should be noted that while the U.S. is the biggest exporter of copper scrap and copper ore in the world, there are only three copper smelters in the country. And only two are operational.
This is why both the Copper Development Association and Tafigura, the world’s largest copper trader, are calling for exemptions from import tariffs on refined copper until new smelting capacity comes online.
There are already efforts being made to increase smelting capacity in the U.S. But that stuff isn’t built overnight. Hopefully, the Trump administration understands this, and will make the appropriate changes to the president’s tariff strategy.
Either way, long-term, the demand for copper remains strong. And domestic producers continue to look very attractive at current levels. The three copper stocks that are most likely to give you the most bang for your buck are …
Freeport-McMoRan (NYSE: FCX)
Lundin Mining (OTCBB: LUNMF)
Southern Copper (NYSE: SCCO)
To be sure, if there is a coming recession, and it hits hard, copper will not be spared. But once the dust settles from this trade war, make no mistake: copper will rebound stronger than nearly any other metal.
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