How to Invest in Copper
New to copper investing? This is the Investing News Network’s hub for educational content on copper.
- How to Invest in Copper
- 7 Basic Copper Facts for Investors
- A Look at Historical Copper Prices
- The Copper Price Today: A Brief Overview
- LME Copper vs. COMEX Copper
- What are Copper Futures?
- 3 Copper ETFs and ETNs
- Top Copper Production by Country
- 5 Top Copper Reserves by Country
- Economics of the Copper Scrap Market
- Is Peak Copper Coming?
- Types of Copper Deposits in the World
- Copper Ore Types: Sulfides vs. Oxides
- Copper Refining: From Ore to Market
Often termed Dr. Copper, the red metal has long been held up as a key indicator of global economic health and is one of the most highly followed base metals.
Copper’s high ductility and electrical conductivity make it the third most consumed industrial metal in the world, behind iron ore and aluminum, as per the US Geological Survey.
Given its attributes, copper is often used for electrical purposes such as power transmission and generation. Like its base metal sibling nickel, it has a major role in the electric vehicle (EV) revolution, with experts expecting consumption of copper to grow 250 percent by 2030 due to EVs.
What caused Copper's sharp rebound?
Read INN's 2021 report today for stocks, expert interviews and more
Read on to get an idea of the supply and demand dynamics that move the copper price, and also how to invest in the red metal. You can also click through the links above and below for more details.
Copper investing: Supply and demand
Similar to any other commodity, copper supply can be prone to disruptions in various capacities: environmental events, worker strikes, economic fluctuations and so on. As such, it’s important to keep an eye on what’s happening in the world’s major copper-producing countries, such as Chile, Peru and China.
The past few years have brought several disruptions to copper ore production, including a strike at Codelco’s Chuquicamata mine in 2019, known as one of the world’s biggest copper mines, and of course 2020’s COVID-19 pandemic lockdowns, which impacted copper mines across the globe.
These and other issues have contributed to big picture concerns for copper output, with some experts nervously anticipating an eventual deficit in copper supply.
While that copper deficit may not come to fruition for quite some time, copper’s long-term demand outlook remains strong. According to the Copper Development Association, copper demand driven by EVs is expected to grow by 1,700 kilotonnes by 2027.
Ongoing trade war issues between China and the US have also had a notable impact on copper as of late. With China being the world’s largest copper consumer, new Chinese import restrictions on copper scrap could put a substantial dent in the market. According to Reuters, China has been working to limit scrap imports in an effort to reduce the shipment of foreign solid waste into the country; however, the outlet notes that scrap accounted for 10 percent of China’s copper use last year.
As with any metal, supply shortages can lead to jumps in price, assuming demand remains intact or rises. The balancing act of supply and demand is fickle, and investors who are curious about copper may want to get involved sooner rather than later.
Copper investing: How to invest
There are a variety of ways one can get involved in the copper market. As with other commodities, exchange-traded funds (ETFs), futures and mining stocks are common methods of capitalizing on copper.
In the case of a copper ETF, investors are able to access the copper market indirectly by looking at funds focused on copper or copper mining companies.
Copper futures contracts give investors a chance to take part in the market in a lower-risk fashion; according to InvestingAnswers, “(Futures) allow buyers and sellers to ‘lock in’ the price at which they buy or sell an asset in the future.” This creates a bit of a safety net effect for those in the market.
Lastly, there are copper stocks, which can be risky, but are one of the most direct routes to the market. Investors can buy shares of companies involved in copper mining and ride the ebb and flow of both these companies’ performance and the copper price.
For reference, some of the largest copper-mining companies are Freeport-McMoRan (NYSE:FCX), Glencore (LSE:GLEN,OTC Pink:GLCNF), BHP (ASX:BHP,NYSE:BHP,LSE:BLT) and Rio Tinto (LSE:RIO,NYSE:RIO,ASX:RIO). These big companies could be a safe place to start.
If you’re interested in the copper market and copper investing, click through the links listed above and below to learn more about this exciting base metal.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
What caused Copper's sharp rebound?
Read INN's 2021 report today for stocks, expert interviews and more
How to Invest in Copper
New to copper investing? This is the Investing News Network's hub for educational content on copper.
7 Basic Copper Facts for Investors
Is copper worth investing in? Here are seven basic copper facts investors interested in the red...
A Look at Historical Copper Prices
Copper prices have been performing with volatility, but historical copper prices have been trending upward for...
The Copper Price Today: A Brief Overview
What factors impact the copper price today? Our quick look at the market covers the dynamics...
LME Copper vs. COMEX Copper
For those new to copper investing, keeping track of copper prices can be confusing. Here’s a...
What are Copper Futures?
Copper futures investing is a popular way to hedge risk while getting some trading experience. Learn...
3 Copper ETFs and ETNs
There’s more than one way to invest in copper. In addition to stocks, investors can gain...
Top Copper Production by Country
Here’s a look at top copper production by country in 2019, as reported by the US...
5 Top Copper Reserves by Country
Which country holds the top copper reserves in the world? Chile, Australia, Peru, Russia and Mexico...
Economics of the Copper Scrap Market
Recycled copper scrap contributes significantly to copper supply and plays a behind-the-scenes role in balancing the...
Is Peak Copper Coming?
For more than a decade, some have warned peak copper is on the horizon. Is the...
Types of Copper Deposits in the World
Different types of copper deposits can be found around the world, and being aware of their...
Copper Ore Types: Sulfides vs. Oxides
What are the different types of copper ore, and how are they processed? Here's a brief...
Copper Refining: From Ore to Market
Copper refining requires putting mined rock through several processing stages. Here's an overview of how that...