ASX copper stocks are getting the kind of attention the lithium miners were back in 2022.
That's because, like lithium a few years back, copper prices are running higher as booming demand outpaces new supplies.
At US$9,418 per tonne, the copper price has already gained more than 10% in 2024. And many analysts are forecasting that the red metal will continue to run higher for some time yet.
Which would be welcome news to shareholders in Aeris Resources Ltd (ASX: AIS) and S&P/ASX 200 Index (ASX: XJO) copper stock Sandfire Resources Ltd (ASX: SFR).
We'll get back to those two miners in a tick.
But first…
What's driving the copper price back towards new highs?
ASX copper stocks have already been benefiting from improving sentiment on the outlook for the red metal.
Atop its broader industrial uses, copper's conductive nature makes it a crucial element in the world's ongoing move towards electrification. And the nascent booming growth in artificial intelligence (AI) and the data centres that support the industry is adding more fuel to that fire.
"We're adding even more sources of demand. First it was the energy transition, now also data centres and AI. That growth has suddenly exploded." Saad Rahim, chief economist at Trafigura said about the copper market (quoted by The Australian).
That demand explosion could push prices far higher, offering some potential ongoing tailwinds for ASX copper stocks.
According to Citi global head of commodities, Max Layton, "We think the stars are aligning for the copper bull story."
Layton's base case scenario (courtesy of The Australian) sees the copper price reaching US$12,000 per tonne by 2026.
But he said copper prices could run above US$15,000 per tonne, or some 60% above current levels if cyclical demand increases at a higher pace.
"Explosive price upside is possible over the next two-to-three years too, if a strong cyclical recovery occurs at any time," Layton said.
Two ASX copper stocks to ride the boom
Which brings us back to ASX copper stocks Sandfire Resources and Aeris Resources.
Aeris is a small-cap miner with a market cap of $198 million. It's in a turnaround phase, with the share price down 60% since this time last year but up a whopping 95% over the past month.
Investor enthusiasm was most recently spurred when Aeris reported on significant copper resource growth potential at its joint venture Canbelego copper project, located in New South Wales.
ASX 200 copper stock Sandfire Resources is considerably larger and more established, with a market cap of $4.2 billion.
The Sandfire share price is up 35% over 12 months, with shares having gained 45% in the past six months.
While the ASX 200 miner also digs up zinc, lead, gold and silver, 74% of its H1 FY 2024 earnings were derived from copper.
And if the red metal continues to charge higher as Citi expects, Sandfire shares could continue to offer some outsized gains in 2024.
