ASX All Ords copper stocks are having a great run as the commodity price surges on the back of low supply and rising demand.
The copper price rose to a two-year high of US$4.70 per pound late last month.
As shown below, the red metal has been rising since early February and is now up 19% in the year to date.
Image source: Getty Images
ASX copper stocks rise on commodity price gains
The rising commodity price has given many ASX copper stocks a bump.
In the year to date:
- Aeris Resources Ltd (ASX: AIS) shares are up 80%
- WA1 Resources Ltd (ASX: WA1) shares are up 43%
- Sandfire Resources Ltd (ASX: SFR) shares are up 33%
- FireFly Metals Ltd (ASX: FFM) shares are up 28%
Why is demand for copper rising?
Copper played a foundational role when the world first embraced electrification back in the 1880s.
The red metal is an excellent electricity conductor. Back then, it was used to make wires and pipes for water and sewage systems, to manufacture telephones, and to power expanding railway networks.
Today, the red metal is poised to once again play a key role in electrification mark II, or in other words, the green energy transition.
Electric vehicles, wind turbines, solar energy systems, and data centres all need copper.
Global copper supplies are currently constrained.
Trading Economics explains why:
Cobre Panama, the world's largest open-pit copper mine was suspended, while power cuts in Zambia hit key mines.
The difficulty in securing supplies and lower margins for smelters in China resulted in a potential cutback of 10% in this year's output.
Broker says buy this small-cap ASX copper stock
If you want to get in on the copper action, Tom Bleakley from BW Equities has a recommendation.
He's got a buy rating on ASX All Ords copper stock, FireFly Metals.
Bleakley explains on The Bull:
FireFly is a copper explorer and developer. The company's Green Bay Copper-Gold project is in Newfoundland, Canada. Exploration has revealed high grade copper mineralisation at depth.
The broker said copper demand would rise over the next decade and "FireFly offers good exposure to a rising copper price".
Firefly Metals is a small-cap ASX copper stock with a market capitalisation of $365 million.
The Firefly Metals share price is 83 cents at the time of writing, up 2.48% on Tuesday.
The big miners expand their copper exposure
Major ASX 200 miners are also expanding their investment into the copper space.
BHP Group Ltd (ASX: BHP) bought out ASX copper pure-play stock Oz Minerals last year for $9.6 billion.
And just last month, the 'Big Australian' made a play for Anglo American plc (LSE: AAL) via a non-binding, all-scrip offer worth 31.1 billion pounds (about A$60 billion).
As my colleague James reported at the time, BHP appeared motivated to buy Anglo American for its copper assets.
If the deal had gone ahead, BHP would have become the largest copper miner in the world, producing about 10% of global output.
Rio Tinto Ltd (ASX: RIO), which began life as a copper miner in 1873, is also increasing its exposure to copper.
