Copper3.75 USD/oz 0.01 (0.27%) (Last updated - January 18, 2024 07:47 AM UTC )
3.13 - 5.04
January 18, 2024 07:47 AM UTCData Powered by Stockdio. Data delayed by 5 minutes unless otherwise indicated.
Copper is a corrosion-resistant and highly conductive metal that finds numerous industrial applications. Copper or ‘red metal’ can be combined easily with other metals to form alloys. An average home could contain up to 180kg of copper. One of the most important aspects of copper is that it can be recycled easily, and 80% of copper ever mined/produced is still in use.
The electric vehicle (EV) boom has bolstered the demand for copper significantly. A typical EV uses five times more copper than an equivalent conventional car. The transport sector as a whole consumes nearly 12% of all copper. The biggest chunk of the metal goes into the manufacturing of equipment, closely followed by the building construction industry.
History of copper
Almost all ancient civilizations have shown evidence of using copper, mostly in the form of coins. The early civilizations soon discovered the alloy properties of copper, which led to the Bronze Age between 3,000- 2,500 BC. Bronze is an alloy of copper and tin.
As the world is shifting towards renewable energy sources like solar and wind, the demand for copper is slated to increase further. Any constraint on the supply side puts pressure on the prices of red metal.
The price of copper is influenced majorly by the demand-and-supply balance. Also, the price trend of copper represents the health of the global economy. If prices are on a surge and sustain at higher levels, then it could be assumed that the global economy is in better shape and growing. This is due to the widespread use of copper in all sectors of the economy.
However, here are the few major factors that drive red metal’s price:
- Global economic condition.
- Demand and supply.
- Condition of the Chinese economy (50% demand)
ASX Copper companies
Frequently Asked Questions
South America dominates the global mining industry. Chile is the world’s largest producer of copper followed by Peru. China is the world’s largest consumer of copper, nearly 50% of globally produced copper finds its use in Chinese factories. China is also the third-largest producer of red metal.
The Corporacion Nacional del Cobre de Chile or Codelco is the world’s largest copper producing company. Codelco produced 1.73 million tonnes of copper in 2020. Australian mining giant BHP Group with 1.72 million tonnes of copper produced in 2020 ranks second in the world.
Copper demand is expected to remain moderate with the world moving towards battery technology. The price trend seems to support the current rise in demand, but commodity prices are highly cyclical in nature.
Investors should pick copper miners who have good exposure to produce assets and also have reserves/resources for future feedstock, operating at a low cost. As the world is fighting climate change and environmental concerns are being given top priority, investors should look at the ESG record of the company before investing in any mining company.
Investing in mature copper miners will also provide dividends with decent dividend yields.
To leverage the bullish copper market, there are two ways through which investors can get exposure to the copper market. The first one is to buy a stock in a copper mining company and the second is through Exchange Traded Funds or ETFs which deals specifically in copper.
Investors can pick major or miner copper players depending on their risk appetite and funds available with them. Some of the major copper miners listed on the ASX are BHP Group (ASX:BHP), Newcrest Mining Limited (ASX: NCM), OZ Minerals Limited (ASX:OZL).
There are no pure-play copper ETF on the ASX. There are a few listed in the United States:
- Global X Copper Miners (COPX)
- United States Copper Index Fund (CPER)
- iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC)
Australia is among the top producers of red metal. The copper-producing centres are concentrated in South Australia and Queensland. The Olympic Dam copper-uranium-gold deposit is the largest copper mine located in South Australia. Mt Isa copper-lead-zinc deposit is another large deposit in the country.
Most of the copper is mined from underground mines in Australia. Copper ore is mined using the traditional method, which involves breaking the ore and bringing it to the surface for crushing. Then the ore is ground finely before being sent for treatment through the flotation process.
Some of the major copper deposits in Australia include Emmie Bluff, Cadia Valley, Mount Elliott, Northparkes, and Mount Gordon.