Copper is among the world's most highly consumed metals. It has an abundance of uses – from our homes to industrial machinery and even plays a critical role in reaching net-zero.
If you're looking to invest in copper stocks, you can choose between pure-play copper stocks on the Australian Securities Exchange (ASX), such as Sandfire (SFR) and OZ Minerals (OZL), or you can buy miners that produce many different metals including copper, such as BHP Group (BHP).
You also have the option of investing in copper ETFs (exchange-traded funds) or trading copper futures or options.
This guide will cover how you can invest in copper stocks in Australia, along with the pros and cons, as well as the best performing copper stocks on the ASX.
There are 2 main types of copper stocks on the ASX:
While both types of stocks will give you exposure to copper, they do come with their own specific strengths and weaknesses.
A pure copper miner has a greater exposure to copper, which could be a positive when the price of copper is rising but a downside when prices are falling.
By comparison, larger mining companies may be diversified across a number of commodities, which could be a better hedge when copper prices are struggling, but might not offer the same upside when prices are high.
If you're looking at buying copper stocks, here are a few things to watch out for:
There are more than a dozen copper stocks on the ASX. We've listed the top 5 based on their performance so far in 2024 (and over the last 5 years). This list was updated on 14 June 2024 using TradingView data.
1. Australian Gold and Copper Limited (ASX: AGC)
Year-to-date performance: 480.88%
5-year performance: 97.50%
2. Kincora Copper Limited (ASX: KCC)
Year-to-date performance: 73.17%
5-year performance: -71.60%
3. Bougainville Copper Limited (ASX: BOC)
Year-to-date performance: 61.43%
5-year performance: 413.64%
4. Aeries Resources Limited (ASX: AIS)
Year-to-date performance: 58.62%
5-year performance: -39.38%
5. Cyprium Metals Limited (ASX: CYM)
Year-to-date performance: 46.67%
5-year performance: -78.00%
6. Peel Mining Limited (ASX: PEX)
Year-to-date performance: 27.27%
5-year performance: -52.67%
7. Culpeo Minerals Limited (ASX: CPO)
Year-to-date performance: 22.22%
5-year performance: -80.00%
8. AIC Mines Limited (ASX: A1M)
Year-to-date performance: 21.74%
5-year performance: 31.94%
9. Sandfire Resources (ASX: SFR)
Year-to-date performance: 17.38%
5-year performance: 40.34%
10. Caravel Minerals Limited (ASX: CVV)
Year-to-date performance: 13.89%
5-year performance: 339.65%
To date, there are no pure-play copper ETFs listed on the ASX, but there are some copper ETFs listed in the US. These ETFs include the following:
You can invest in the asset through its future prices without actually taking ownership of it.
In Australia, contracts for difference (CFDs) are most commonly used when it comes to trading commodities.
CFDs are derivative investment products that allow you to trade on the future prices of underlying assets such as commodities, stocks and indices.
By investing in copper CFDs, you're speculating on the price of the asset in the future. In other words, you're agreeing to pay today's prices for an asset that gets delivered sometime in the future.
If the price rises between now and the time when the CFD finishes, you'll either make or lose money depending on how the trade played out. For example if you think the price of copper will fall and trade against it, but instead the price rises, you'll lose your investment.
On the flip side, you can also bet against copper. If you think the price will drop, you can "short" the contract. This means they put in an order to sell the asset at today's prices for delivery in the future. Now, if prices drop between the time the short contract was purchased and the contract expiry date, the price difference will be the trader's profit for the trader.
However, this is a riskier way to gain exposure to the sector. It is not advised that beginners use CFDs.
Futures and other options work in a similar way. When it comes to future copper contracts, you're agreeing to buy an asset at a future set price. In other words, you're agreeing to pay today's prices for an asset that gets delivered sometime in the future. You can once again go long (expect the price to rise) or short (expect the price to fall) in the futures markets.
Copper has an expansive range of industrial and consumer applications – from factories and transmission lines to homes and electronics. And the recent push for electric vehicles (EVs) is likely to increase the demand for this essential metal.
Electric vehicles have 5 times more copper than traditional cars.
And this new driving technology will also require large amounts of copper to support its electric charging infrastructure. Copper’s strong ties to many sectors of the economy likely mean that the demand isn’t going anywhere.
Not only is demand expected to grow due to EVs, it also plays an important role in solar and wind energy systems. So regardless of what green energy initiative is implemented, it is likely that copper stocks will benefit.
Copper is a reddish-orange metal that is corrosion-resistant and an excellent conductor of heat and electricity. In its natural state, copper is soft, solid and can be moulded into different shapes and thicknesses.
It is naturally found in ore deposits that are mined or leached. Mining crushes and grinds the ore into powder, where the unwanted materials and other impurities are removed. Leaching uses sulphuric acid to remove the copper from the other ore minerals.
Copper has a plethora of uses across 5 main markets:
Copper stocks generally refer to companies that explore, develop, produce and sell copper all over the world.
While copper is one of the most abundant metals on Earth, only a small portion is economically viable to extract at today’s prices using current technologies. So mining companies are vulnerable to copper price fluctuations, which are easily impacted by geopolitics.
For example, global copper prices fell to their 2-year low in 2019. It was collateral damage amid the escalating trade war between the US and China – a country that consumes over 50% of the world’s metal. So even though in 2023 there are a number of tailwinds for the sector, it can easily change.
An additional risk is that there are other practical substitutes for copper.
In some instances, manufacturers can use aluminium instead of copper. These include automobile radiators and optical fibre in telecommunications equipment. Plastics can also be used for pipes and plumbing fixtures instead of copper. As such, it could see a lower demand for copper, meaning the price of the commodity could fall.
Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
Copper is involved in a lot of economic sectors. While copper's consumer and industrial applications keep it in demand, you’ll need to keep an eye on global trade wars.
Consider a few different trading platforms that offer international brokerage accounts to add copper to your investment portfolio.
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