The ASX 200 materials sector, which is dominated by mega mining shares, has surged 26% in the year to date (YTD).
Yesterday, the three largest ASX 200 mining shares and the biggest pure-play copper stock reached new 52-week highs.
Top ASX 200 mining shares rise to new highs
The BHP Group Ltd (ASX: BHP) share price rose 3.8% to a 52-week peak of $44.60 yesterday, and is $44.63 at the time of writing.
The Fortescue Ltd (ASX: FMG) share price lifted 1.15% to a 52-week high of $22.03, and is $21.78 on Friday.
The Rio Tinto Ltd (ASX: RIO) share price increased 3.9% to a 52-week high of $140.58, and is currently $137.82.
Pure-play ASX 200 copper share, Sandfire Resources Ltd (ASX: SFR), rose 5.3% to a record $17.20, and is $16.68 today.
James Gerrish from Shaw and Partners said ASX mining shares have had a strong run and boosted many mining-focused ASX ETFs.
Gerrish and his Market Matters team think there's not too much more room to run, commenting:
The outperformance by the materials sector is starting to look and feel mature but there are no signs that it's time to dramatically restructure portfolios.
Yesterday's boost for the big ASX 200 iron ore shares followed a 2.9% lift in the iron ore price this week to US$107 per tonne, taking the YTD gains to 4.1%.
The Market Matters team can see iron ore grinding about 5% higher over the coming weeks and months.
Gerrish commented:
Most focus in commodities over the last few months has been on gold, silver, and copper, but iron ore has also broken out to new 2025 highs, albeit in a less dramatic fashion.
We are not fading this advance by the bulk commodity and related miners but we do believe the "easy money" is in the rear view mirror.
Turning to copper, Market Matters is bullish on the red metal over the medium and long term.
BHP and Rio Tinto have significantly increased their copper operations amid higher demand due to the green energy transition.
BHP is now the world's largest copper producer, and copper formed 45% of its total underlying EBITDA in FY25, up from 29% in FY24.
The copper price has risen 3.8% this week and 32.5% YTD to US$5.27 per pound on Friday.
Expert reveals 2 preferred ASX ETFs
Yesterday, Global X Copper Miners ETF (ASX: WIRE) rose to a record high of $20.62 per unit.
This is the Market Matters team's preferred copper play among ASX ETFs.
BHP and Sandfire Resources shares comprise about 8% of holdings, with Capstone Copper Corp CDI (ASX: CSC) providing another 3.3%.
Gerrish said:
The ASX-listed Global X Miners ETF (WIRE) remains one of our preferred vehicles for broad exposure to global copper producers.
From a regional perspective, it only has 11% exposure to Australia, with Canada providing the main holdings.
It has a decent $400mn market cap, while its fees are okay at 0.65%.
Market Matters is now targeting $22 to $24 for the WIRE ETF over the coming weeks and months.
We remain firm believers in the Cu story over the coming years but are conscious that the WIRE ETF has now reached our initial target area, but if Cu continues to accelerate higher the skies the proverbial limit i.e. surprises are still likely to be on the upside although the "easy" money does feel behind us.
Turning to gold, Market Matters expects the gold price to reach US$4,500 per ounce before it takes a breather.
This morning, gold is trading at US$4,207 per ounce, down 0.03%.
Market Matters is bullish towards gold in the short term. The team's forecast will strengthen if a US rate cut eventuates next week.
Next week's Fed decision will be important to a bullish thesis around gold in the coming months but with a cut feeling inevitable we see no reason to doubt our view at this stage.
The team likes the VanEck Gold Miners AUD ETF (ASX: GDX), which hit a record $105.92 per unit yesterday.
They expect this ASX ETF to test the $135 to $140 range over the coming months.
Gerrish said:
The ASX gold stocks are a refreshing and rare example of where local investors have enjoyed outperformance compared to their overseas peers with the GDX ETF tracking the gold price and remaining below its October high.
It has a large $1.4bn market cap, backed up by $US23.9bn in its US parent, around 11% of the ETF is in Australian names while its fees are a reasonable 0.53%.
