It’s been an interesting year for copper prices, which rocketed to an all-time high last week. This comes on the back of strong demand for copper’s widespread application, including in the electrical (including electric vehicles) and construction industries.
Below we take a closer look at the copper price and the major ASX copper shares.
Copper spot price near all-time high
Investor interest in the brownish-orange metal has picked up of late, with copper hitting a record high price of US$4.76 per pound last Wednesday. Furthermore, copper prices have jumped by around 32% so far in 2021.
The recovery of the world economy from the impacts of COVID-19, along with supply constraints, has driven copper prices to extraordinary levels. In addition, the demand for electric vehicles, which require copper as a key component of their batteries, has soared.
At today’s prices, copper is being exchanged for US$4.67 per pound, up 0.2% for the day.
What are the ASX copper shares?
At current, there are 11 copper-focused ASX-listed companies. While the majority of these have market capitalisations of less than $200 million, there are three notable big players. These are OZ Minerals Limited (ASX: OZL), Sandfire Resources Ltd (ASX: SFR), and Aeris Resources Ltd (ASX: AIS).
Unsurprisingly, the share prices of the three largest ASX copper miners have accelerated in recent times.
OZ Minerals, the ASX’s biggest copper company by market cap, has seen its shares surge by around 186% over the past 12 months. Year-to-date performance sits at above a 31% gain. Notably, the OZ Minerals share price reached an all-time record high of $27.15 just last week. Currently, the company’s shares are trading 1.39% lower for the day at $24.81.
Sandfire Resources, the second-largest ASX copper company, has also stormed higher of late. The Sandfire share price has rallied by around 74% since this time last year and has advanced by around 40% year to date. The company is very close to breaking its multi-year high of $7.83, which was also set last week. At the time of writing, its shares are trading at $7.46.
Meanwhile, Aeris Resources shares have exploded by around 400% on their one-year price chart. The strong growth could be partially attributed to the fact the company’s market cap is considerably smaller than OZ Minerals and Sandfire Resources. At today’s prices, Aeris Resources is valued at around $307 million, compared to $8.2 billion and $1.3 billion for OZ Minerals and Sandfire, respectively.
The Aeris Resources share price hit a new multi-year high of 18 cents today before retreating to its current level of 16 cents.
Where to next for copper prices?
A number of analysts have put forward their views regarding future copper prices.
On 4 May, Bank of America commodity strategist Michael Widmer highlighted that the current copper supply covers just 3 weeks of global demand. He said (quoted by CNBC):
Linked to that, we forecast copper market deficits, and further inventory declines, this year and next. With (London Metal Exchange) inventories close to the pinch-point at which time spreads can move violently, there is a risk backwardation, driven by a rally in nearby prices, may increase.
According to Bank of America, copper prices could hit US$20,000 per metric tonne by 2025.
The following day, David Neuhauser, founder and managing director of United States hedge fund, Livermore Partners told CNBC:
I think copper is the new oil and I think copper, for the next five to 10 years, is going to look tremendous with the potential for $20,000 per metric ton.
We think there are some very solid small cap companies that have massive production potential, and valuations are attractive.