ASX copper stocks in the spotlight as the red metal soars to 2-year highs

The copper price is up 15% in 2024. Can the red metal's bull run continue?

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Investors in ASX copper stocks will welcome the news that copper prices hit two-year highs of US$9,998 per tonne earlier today.

The copper price has since retraced a touch, to US$9,830 per tonne.

Still, that sees the red metal up 15% from 2 January, when that same tonne was trading for US$8,555.

As for ASX copper stocks, the Aeris Resources Ltd (ASX: AIS) share price is up 1.8% today at 29 cents a share. That sees the Aeris Resources share price up an eye-popping 102% so far in 2024.

S&P/ASX 200 Index (ASX: XJO) copper stock Sandfire Resources Ltd (ASX: SFR) isn't getting a lift today, with shares having given back modest earlier gains to be down 0.1% at the time of writing. Still, the copper miner, with a market cap of $4.1 billion, has seen its share price soar 22% year to date.

Then there's BHP Group Ltd (ASX: BHP).

While better known for its iron ore operations, the ASX 200 miner has a very sizeable copper footprint.

Over the half year through to 31 December, BHP produced 849,000 tonnes of copper. The red metal delivered underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $3.5 billion for BHP for the six-month period. And this was achieved at far lower prices than we see today.

Aware of the global demand growth for the red metal, the ASX copper stock has been ramping up production. BHP's Escondido mine in Chile increased half-year output by 3% to 528,000 tonnes of copper.

The BHP share price is up 0.3% at the time of writing, at $45.54.

What next for ASX copper stocks?

The fast-rising copper prices helping lift ASX copper stocks have been fuelled by increasing demand amid supply disruptions at major mines around the world.

As with iron ore, demand from China has been tepid in recent months. But with China's manufacturing industry showing surprising strength and the government potentially rolling out further stimulus measures for the beleaguered property markets, investors are broadly expecting a pick-up in demand from the world's number two economy.

Commenting on what's ahead for copper, Citigroup analysts said the copper price outlook is bullish over the next three months.

According to Citigroup (quoted by Bloomberg), "The path forward from here will be data-dependent and led by individual metal fundamentals." They noted that other metals have weaker physical fundamentals.

And the longer-term outlook for ASX copper stocks looks even more promising.

Graeme Train, head of metals analysis at Trafigura, estimates that global copper demand will increase by at least 10 million tonnes over the next decade. That booming demand will be driven by the rapid growth of EVs, energy-hungry AI data centres, power infrastructure and automation sectors.

According to Train, a third of the additional copper demand will come from EVs.

Train added (courtesy of Reuters), "A third is electricity generation, transmission and distribution, and the rest is for things like automation, manufacturing capex and cooling systems within data centres."

India also could offer ongoing tailwinds for ASX copper shares.

Train said ongoing industrialisation and urbanisation in India, the world's most populous nation, should drive increased demand for the red metal.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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