Copper Staging a Comeback in 2026: 3 Stocks to Buy

Industry Overview - Copper prices are experiencing renewed momentum, with expectations for stronger prices heading into 2026 due to tightening global supply and solid demand, particularly from China and the U.S. [1][4] - Copper consumption is projected to accelerate significantly, driven by traditional industrial demand, energy transition trends, and the rapid expansion of digital infrastructure [2][9]. - The U.S. Geological Survey has included copper in its 2025 List of Critical Minerals, highlighting its strategic importance for U.S. energy independence and national security, which may lead to policy support and faster permitting [5]. Price Trends - Copper prices have fluctuated between $4.01 per pound in January and an all-time high of $5.96 per pound in July, currently trading around $5.47 per pound, with a year-to-date average of approximately $4.84 per pound [3]. - Prices have increased by roughly 35.8% this year, marking the highest gain since 2009, driven by strong demand and supply constraints [5][10]. Demand Drivers - Demand for copper has increased nearly fourfold over the last five decades, supported by sectors such as electrical and electronic products, building construction, and transportation equipment [8]. - The energy transition is a significant driver, with electric vehicles requiring more copper than traditional vehicles, and renewable energy systems heavily relying on copper supply [9][10]. Supply Constraints - Concerns over declining ore grades and lengthy timelines to bring new mines online are contributing to fears of a looming supply deficit, which supports higher copper prices [2][11]. - Supply fears are exacerbated by potential disruptions at major mining operations, including Quebrada Blanca, Grasberg, and Constancia [4]. Company Highlights BHP Group - BHP has reduced long-term debt and improved operational efficiency, with copper now contributing 39% of its EBITDA [13]. - The company has a robust pipeline that could deliver around 2 million tons per annum of copper production by the 2030s, with significant projects in Chile and the U.S. [14][15]. Southern Copper - Southern Copper has the largest copper reserves in the industry and is investing over $15 billion in capital projects, primarily in Peru [16]. - Key projects include Tía María, Los Chancas, and Michiquillay, which are expected to significantly boost copper production [18][19]. Teck Resources - Teck Resources is merging with Anglo American to form the Anglo Teck group, which will have over 70% exposure to copper and is projected to be among the top five global copper producers [20]. - The merger is expected to yield $800 million in annual pre-tax synergies and generate additional EBITDA synergies from 2030 to 2049 [21][22].