Founder, Masters in Trading
Today, I want to build on our discussion on copper’s price surge — this move has been nothing short of explosive. We touched on the topic last week during Masters in Trading Live, but there’s a lot more to unpack here. So, let’s take some time and really dive into what’s driving this rally, what it means for the markets, and, most importantly, how we can profit from it.
If you’ve been paying attention lately, you know that copper has moved from $4 to $5 in just three months. That’s a massive move for an industrial metal, and it’s making headlines now, even on mainstream media like CNBC and Fox News. That’s massive for an industrial metal, and the smart money’s already piling in.
We’re talking about $3.2 million worth of call buying in Freeport-McMoRan (FCX) just last week. That’s institutional money saying, “Hey, copper’s going higher, and we want in.” And when you see that kind of aggressive buying, you know something big is brewing. That’s not just speculation—that’s conviction. And when institutional money starts pouring in like that, it’s a signal that we can’t ignore.
The Tightening Copper Landscape
Take a look at this copper chart below. What we’re seeing here is simply ferocious buying in all things correlated with copper. The global copper market is entering 2025 with an increasingly tight supply-demand balance.
Demand growth remains robust, driven by continued electrification and infrastructure needs. Analysts project global copper consumption to grow around 2.9% in 2025, with much of the growth coming from outside China as Western economies invest in grid upgrades and electric vehicle (EV) production.
Back in September, we saw Chinese ADR stocks absolutely explode when China announced a massive stimulus plan to jumpstart its slowing economy. They’re targeting the usual suspects: property sector revival, consumer spending boosts, and ramping up support for manufacturing and infrastructure.
Now, why does that matter to us in the copper market? Simple – China is the kingpin when it comes to copper demand. They account for roughly half of the global copper appetite. We’re talking massive construction and infrastructure projects, electric vehicles (EVs), renewable energy rollouts, and the whole manufacturing machine – electronics, heavy industry, you name it. If this stimulus actually does its job and gets that economic engine revving, it’s a serious tailwind for copper prices and, of course, the mining stocks riding that wave.
While demand’s been ramping up, supply is where things get interesting – and by interesting, I mean tight. Copper mining output just isn’t keeping up. Your big producers like Chile and Peru are dealing with declining ore grades, and they’re constantly battling disruptions from labor strikes and tighter regulations. And here’s the kicker – new production? Barely any. Apart from a handful of major projects, there just aren’t many advanced-stage mines coming online in stable jurisdictions.
So what are we looking at? A copper deficit on the horizon. S&P Global’s Commodity Insights is calling for a modest deficit of about 52,000 metric tons (52 kt) this year, but that gap is set to blow out to around 848,000 metric tons (848 kt) by 2025 as demand smashes through supply limits. ANZ Bank’s not far off with their forecast – they’re seeing about a 500,000 metric ton (500 kt) shortfall next year, which is roughly 2% of annual global demand.
If that happens, we’re talking about a critical turning point. The energy transition is kicking into high gear, and copper is the backbone of it all. We’ve got EVs, charging infrastructure, renewable grids – the whole shebang. Demand is outstripping what the mines can deliver, and that’s going to put the squeeze on supply. Now, not everyone’s calling for a massive deficit – some see new mine output picking up – but here’s the bottom line: whether it’s a small surplus or a big shortfall, the market’s balanced on a knife’s edge. And given how little investment has gone into new production over the past decade, I’m telling you – we’re leaning towards a supply crunch. Keep an eye on this space because it’s shaping up to be a wild ride.
How to Trade the Copper Surge
When it comes to trading copper, there’s no need to overcomplicate it. All the companies involved in copper are going to move with the price of the metal. Copper is up 11% for the month and 27% for the year. The way I see it, all companies involved in copper are going to move with the metal’s price. I’ve analyzed the landscape, looked at the moves these companies are making, and pinpointed the most promising opportunities.
You want to be in the right names at the right time, and I’m here to make sure you are. Here are the top 5 copper plays I’m looking at right now — let’s dive in…
Freeport-McMoRan (FCX) – Copper Giant with Growth Initiatives
Freeport-McMoRan is the world’s largest publicly traded copper producer, operating massive mines in North America, South America, and Indonesia. In 2023, Freeport’s copper output was 2.06 million tonnes (2,060 kt), solidifying its position at the top. The flagship Grasberg mine in Indonesia (one of the world’s richest copper and gold deposits) has completed its transition from open pit to underground, which drove a production surge in recent years.
Management slightly lowered 2025 production guidance to 1,814 kt (from 1,905 kt) after encountering challenges – notably, a mill maintenance issue in Indonesia and a smelter fire in late 2024. Despite these setbacks, output is expected to resume growth in 2026, with guidance for 1,950 kt remaining intact.
Freeport is also pursuing cost-effective growth via innovation: it is implementing a leaching technology to squeeze additional copper out of low-grade waste piles, targeting an added 800 million lbs (about 363 kt) per year by around 2025–2026. If successful, this could lift production without major new mine builds, enhancing Freeport’s growth profile. If copper enters a bull market in 2025–26, Freeport is well-positioned to outperform, and the $3.2 million options order we spotted last week is clear evidence that it’s firmly in the crosshairs of institutional traders.
Southern Copper Corporation (SCCO) – Steady Producer with Enormous Reserves
Southern Copper, majority-owned by Grupo México, is a pure copper miner known for its consistent operations and large reserve base. It produced 556 kt of copper in 2023 from its mines in Peru and Mexico. While much smaller than Freeport in output, SCCO boasts the largest copper reserves in the industry (proven reserves of over 67,000 kt), which underpins a mine life measured in decades.
Southern’s growth has been incremental – the company expects a 2.7% increase in 2024 production (to roughly ~570 kt) as its new Pilares mine in Mexico ramps up, and similar steady growth into 2025. The big potential leap for SCCO is the long-delayed Tía María project in Peru, which after years of local opposition is now slated to start production in 2027. Beyond that, Southern has additional projects in Peru and expansions in Mexico that could collectively add several hundred-thousand tonnes, but these are on mid-to-late decade timelines.
All-in-all, Southern Copper’s production outlook for 2025 is stable with minor growth, with the major boosts coming later if and when new mines come online. For those interested in income investing, Southern Copper also pays out a high portion of earnings as dividends – its yield fluctuates (recently ~4-5%) depending on copper prices and special dividends.
BHP Group (BHP) – Diversified Major Pivoting Towards Copper
BHP is a globally diversified mining giant, traditionally known for iron ore, coal, and petroleum, but it has been increasing its emphasis on copper and other “future facing” metals. In 2023, BHP produced 1,390 kt of copper, making it the second-largest producer among our five selections.
The bulk of BHP’s copper comes from its Escondida mine in Chile — the world’s largest copper mine, which BHP operates with a majority interest — and its Australian mines. BHP’s copper production grew about 10% year-on-year as of early 2024, aided by operational improvements and the contribution of new assets. Notably, in 2023 BHP acquired OZ Minerals for $6.4 billion, adding the Carrapateena and Prominent Hill copper mines in Australia, which will boost BHP’s copper output in 2025 and beyond. It is clear BHP is on the hunt for more copper – the company even launched (and later dropped) a takeover bid for Anglo American in 2024 to grab more copper assets. For 2025, BHP’s copper output is expected to hold around 1,400–1,500 kt, with minor growth from the ramp-up of the OZ Minerals mines and potential grade improvements at Escondida.
Longer-term, BHP is studying expansions of its major Australian mines and could pursue further acquisitions. Production growth is moderate but steady, and importantly, copper still represents only around 20% of BHP’s earnings (iron ore is ~50%). This diversification means BHP’s overall performance isn’t as tied to copper alone – which is both an advantage and a drawback depending on market conditions.
Rio Tinto (RIO) – Diversified Miner Unlocking Copper Growth
Similar to BHP, Rio Tinto is one of the world’s largest diversified miners. Rio’s primary revenue driver is iron ore, but it has a significant and expanding copper division. In 2024, Rio Tinto’s mined copper production was 697 kt (up 13% from 2023), and the company has guided to 780–850 kt in 2025 – a potential 16-26% jump in output.
The catalyst is Rio’s massive Oyu Tolgoi mine in Mongolia, where the underground phase is currently ramping up. Rio now owns a 66% share of Oyu Tolgoi after acquiring Turquoise Hill Resources and is seeing output climb. Oyu Tolgoi is expected to be one of the world’s largest copper mines at full tilt (~500 ktpa), and 2025 will see a substantial increase as underground operations reach capacity. Additionally, Rio holds a 30% stake in Escondida and operates the Kennecott mine in the U.S., among other assets.
Longer-term, leadership at Rio is aiming for 1,000 kt of copper production annually by 2030. On top of its current production, RIO has development projects in its pipeline such as La Granja in Peru and exploration projects in Kazakhstan.
Overall, Rio Tinto offers a mix of value and growth – it’s priced like a value stock but has a growth angle in copper. Execution on Oyu Tolgoi and maintaining stable operations at its legacy mines will be key as it seeks to re-rate in investors’ eyes.
Teck Resources (TECK) – Transformation into a Copper Growth Story
Teck Resources, a Canadian miner, is undergoing a significant transformation. Traditionally, Teck’s earnings were dominated by steelmaking coal, along with notable zinc operations and some copper output. However, Teck has made strategic moves to become a primarily copper-focused company.
In late 2023, Teck reached a deal to offload its coal business (CoalCo) to an investor consortium, bolstering its balance sheet with cash. Simultaneously, Teck brought online the Quebrada Blanca 2 (QB2) project in Chile – a game-changing new copper mine. QB2 commenced production in 2023 and ramped up through 2024. Teck’s attributable copper production is set to jump from just 296.5 kt in 2023 to roughly 500 kt in 2025 as QB2 reaches full capacity. Indeed, Teck’s guidance for 2025 is 490–565 kt of copper, nearly double the pre-QB2 level. This rapid growth (one of the fastest among peers) positions Teck as a copper producer on par with some larger diversified peers.
Beyond QB2, Teck has additional copper growth options: it owns 50% of the NuevaUnión copper project in Chile and the Zafranal project in Peru, and could expand its existing mines in Canada. With the coal business separation, Teck is essentially betting its future on copper.
The stock spiked when takeover rumors emerged (Glencore made an unsolicited bid in April 2023) and later pulled back. The possibility of M&A still lingers: Teck is an attractive target as a pure copper growth play with clean finances. A buyout at a premium is one way it could deliver outperformance versus the market. Teck offers high copper leverage and growth, and thus high potential risk and reward — which is why we took aim on the May $45 calls in our promotional portfolio.
Copper’s Road Ahead
The stage is set for copper producers to outperform, especially if the market tightens as many forecasts predict. As we move through 2025, the key to understanding their trajectory lies in watching the pulse of global demand. Keep a close eye on China’s stimulus measures, booming EV sales, and massive infrastructure investments — these will be the driving forces behind copper’s next move.
On the supply side, pay attention to potential disruptions at major mines and the timelines of new project ramp-ups. Any unexpected hiccups could further constrict supply, adding fuel to the bullish fire. If these factors align, copper miners could indeed outpace the S&P 500 in the quarters ahead—making it crucial to stay vigilant and responsive to market signals.