Copper Investing: Market Insights & ASX Stocks

Copper moves electricity better than almost anything else (and costs far less than the alternatives). Every electric vehicle needs about 80 kilograms of it. The use across wind turbines, solar farms, data centres – mean the demand for copper isn’t going anywhere.

The metal’s been around forever, but electrification means we need more in the next couple of decades to 2050, then has been mined in the history of copper production. Unlike some commodities, there’s no substitute that works at scale, and the major miners know this, and are investing billions in finding new copper deposits.

The easy copper’s gone. Most big deposits were found decades ago, and what’s left sits deeper underground and isn’t easily discovered. Getting a new mine from discovery to production takes about 15 years if everything goes right (and to be honest, it rarely does).

Existing mines keep digging into lower-grade rock, which means more effort for less metal. The profit margins of these mines are squeezed and if the deposit is too deep and the grade isn’t high it becomes uneconomic. That gap between what we need and what we can produce is widening (just look-up ‘copper squeeze’) and that’s where the opportunity sits.

Copper trades on commodity exchanges like the London Metal Exchange and COMEX in the US, priced in dollars per pound or per tonne. Industrial buyers and speculators push prices around based on supply, demand, and sentiment. When warehouse inventories run low on stock, prices tend to climb, if there is a disruption to a mine prices climb.

On the other hand if global growth figures slow, so does the demand for copper. Copper is often referred to as Dr Copper, as it’s a good sense to check how strong global economic growth is. It’s one of those markets where inventory reality eventually catches up with speculation.

Manufacturing and construction drive most copper demand – when factories hum and buildings go up (or a massive disruptor like AI comes along), copper moves. Supply disruptions in major producing regions can shift prices overnight.

Watch warehouse inventory levels (the actual tonnes sitting in storage) and the gap between spot and futures prices. The spot price is today’s price if copper is bought or sold, the future price is where traders can buy copper contracts to sell in the future. The advantage comes for a trader if they buy a copper contract at a price today and then the price of copper appreciates in the future. When inventories drop and spot prices spike above futures, the market’s telling you it’s tight.

Look at grade first – how much copper sits in each tonne of rock. Higher grades usually mean lower costs. Then check depth and location. A shallow deposit near roads and power beats a rich one in the middle of nowhere. As does a deposit in a tier-one mining country like Australia compared to a third world location.

Tracking drilling updates is crucial,along with environmental approvals, and funding announcements. The best stories combine decent grades, manageable logistics, supportive governments, and management who’ve actually built mines before. If you’re lacking in any of these you may run into issues quickly.