Copper prices reached an all-time pinnacle on Wednesday, marking a remarkable 30% surge in 2024. This extraordinary ascent has ignited a rally in prominent copper mining stocks, notably Newmont and Freeport-McMoRan.
On Wednesday, copper futures extended their winning streak for the fifth consecutive session, climbing over 1% to $4.94 per pound. This surge culminated in an unprecedented high of $5.17 per pound, according to CME Group data.
The escalating copper prices stem from growing apprehensions about potential supply shortages. The rising demand for copper is fueled by various factors, including the burgeoning fields of artificial intelligence, cryptocurrency data centers, electric vehicles, and renewable energy initiatives.
Earlier this year, Nvidia, a leading technology company, announced its increased utilization of copper in its artificial intelligence computing systems. This strategic move aims to curtail power consumption in data centers, a growing concern as energy demands escalate.
The International Energy Agency projects a substantial 15% compound annual growth rate in global data-center power demand through 2026. JPMorgan’s analysis suggests that this growth could necessitate an additional 2.6 million metric tons of copper by 2030, constituting approximately 2% of the anticipated global copper demand.
This burgeoning demand for copper further exacerbates an already projected supply deficit of 4 million metric tons by 2030, according to JPMorgan’s assessment.
Mining Stocks Seize the Moment
Newmont stock rose 1.5% to 43.20 during Wednesday’s market session. This copper mining stock finds itself in a favorable position, trading approximately 3% above a well-defined cup-with-handle 41.30 buy point.
Newmont has achieved three consecutive monthly gains, catapulting its shares 36% higher since the close of February. The stock boasts a Composite Rating of 96 out of a possible 99, further solidifying its positive trajectory.
Simultaneously, Freeport-McMoRan shares nudged upwards to 53.62 on Wednesday, following a new 2024 high of 53.66 on Tuesday. This places it in a buying zone above the April 29 high of 52.52.
FCX stock has demonstrated impressive momentum, securing 10 weekly advances in the past 11 weeks. After reclaiming its 200-day moving average in early March, the stock has surged by an impressive 34%.
Southern Copper, another notable copper mining stock, experienced a slight decline of 0.8% to 122.85 on Wednesday. This followed an all-time high of 125.07 on Tuesday, exceeding the April 29 high of 121. Shares remain within a buy zone extending to 127.05. The copper stock has soared 44% in 2024.
In conclusion, the unprecedented surge in copper prices has triggered a significant upswing in the mining sector, with notable copper mining stocks capitalizing on this golden opportunity. As the demand for copper continues to escalate, driven by technological advancements and the global shift towards renewable energy, the mining sector may be poised for an extended period of prosperity.
