Contrarian Value Ideas

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Derf, Looks like China cutting production was the main catalyst for the current pop in copper -


>>> These Copper Stocks Shine At A New High As Prices Soar


Investor's Business Daily

by KIMBERLEY KOENIG

03/18/2024


https://www.investors.com/research/copper-prices-southern-copper-freeport-mcmoran-scco-fcx-stock/?src=A00220


Copper prices have rallied to levels not seen since April 2023. That's led industry players such as Southern Copper (SCCO) and Freeport-McMoRan (FCX) to pop and reach new highs.

Copper prices continue to rise, with the current price around $4.15 per pound. The recent boost came after news on March 13 that Chinese smelters will cut production at some facilities.

Copper is used in industries ranging from coin production to crude oil exploration. China and India are large consumers of copper used in infrastructure and transportation industries, while the U.S. uses it in homebuilding.

Copper stocks lead IBD's metal ore mining group, which contains 46 stocks in copper, gold, uranium and other mineral mining industries. The group ranks 177th out of the 197 industry groups tracked by Investor's Business Daily.

Prices Lift Southern Copper To New High

Southern Copper ranks No. 1 in the group. The stock reached an all-time high on Monday in heavy volume, and has gained 28% this month thus far as copper prices rise.

Shares are extended from a flat-base buy point of 88.40. Southern Copper stock retook its 50-day moving average on March 7. The stock gapped up 10% and broke out of the base on March 13, after news of a China production cut. Volume has been strong as the stock has climbed.

The copper stock is on track for its longest winning streak since Jan. 13, 2023, when it rose for nine straight trading days, according to Dow Jones Market Data.

On Monday, IBD upgraded the stock's EPS Rating to 91 from 88. Southern Copper holds a best-possible A+ IBD Accumulation/Distribution Rating, indicating very heavy institutional buying over the last 13 weeks. Its relative strength line has also made a sharp increase thanks to copper prices. Analysts forecast 10% full-year earnings growth in 2024 and 19% in 2025.

Freeport-McMoRan In A Buy Zone

Freeport-McMoRan reached a 52-week high on Monday. The copper and gold miner also broke out of cup-with-handle base with a 43.42 buy point in heavy trading on March 13, according to the weekly MarketSurge chart. Shares are in the 5% buy zone reaching to 45.59.

Shares have gained 18% in March thus far with rising copper prices. Freeport-McMoRan specializes in mining for gold, copper, silver, molybdenum, oil and natural gas.

Among others in the industry, Teck Resources (TECK) dipped on Monday but is holding a good portion of gains from Wednesday's 8% gap-up. The stock is flirting with a resistance around the 45 price level. Shares have gained 16% this month so far. Teck Resources is a miner of copper, zinc, cadmium and other metals and minerals.

Finally, Hudbay Minerals (HBM) also eased on Monday after reaching a 52-week high on Friday. The stock has climbed off a low of 3.94 on Nov. 10, and is nearing its 52-week high of 7.01. Thanks to increases in copper prices, the stock is up about 17% thus far in March. The Canadian miner focuses on copper.

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