Nick Hodge,
Publisher
March 25, 2025
The copper price is bullish, having broken out of a downward wedge last month and hitting nine-month highs this month north of $5.00 per pound. Over the past year, it is up nearly 25%
Copper mining stocks have not gotten the message.
The iShares Copper and Metals Mining ETF (NYSE: ICOP) is flat over the past year.
It’s time for copper stocks to catch up with copper prices.
The fundamental long-term thesis is certainly the same for both: The world’s copper mines are aging, we aren’t finding enough large and/or high-grade deposits to replace them, and we’re going to need much more of the stuff for the energy transition (and now AI, too!).
In the short-term, new narratives and even some realities have emerged.
Tariffs are the obvious one, even if the President himself doesn’t quite have a handle on them yet. When he addressed Congress on March 4, he said:
I have also imposed a 25 percent tariff on foreign aluminum, copper, lumber, and steel, because if we don’t have, as an example, steel and lots of other things, we don’t have a military and, frankly, we just won’t have a country very long.
But there have not yet been any tariffs imposed on copper. I know it changes by the minute, but the current tariffs are on aluminum and steel as of March 12.
Still, the comment from the commander-in-chief sent copper prices northbound in the western world, with prices rising on the COMEX more than on the LME as traders placed a premium on getting physical metal into the Land of the Free.
As Bloomberg recently reported:
Comex copper inventories — which swelled after a similarly large price spike on the exchange last year — have been drawing down in recent days, indicating that US manufacturers may also be looking to stock up before tariffs come into effect. Meanwhile, requests to withdraw the metal from the LME have soared.
As you can see on the above chart, the COMEX price actually started separating itself from the back as early as December. It’s amazing how the market sniffs things out.
Preceding any tariffs is an investigation ordered by Trump via executive order relating to Section 232 of the Trade Expansion Act of 1962. It will be carried out by the Commerce Department to determine if foreign copper production is a threat to the US economy or national security. Under the law, the commerce secretary has nine months to report the findings.
You might recall that uranium underwent a similar investigation five or six years ago, which culminated in significant federal support for the sector and helped kick off a bull market that is now consolidating its gains.
I expect something similar in the copper space.
Rather than get lost in the weeds of what the tariff will be and when it will be imposed, the seeds of which have only just been sowed, let’s instead look to the fruit of what this is doing to market and investor psychology.
Not just copper, but mining copper, is now important for our national defense and for the very survival of our country according to the most powerful man in the world. And Howard Lutnick, the gentleman who will be conducting the Section 232 investigation as Trump’s commerce secretary, is fully on board. He said last month that “Tariffs can help build back our American copper industry, if necessary, and strengthen our national defense. American industries depend on copper, and it should be made in America — no exemptions, no exceptions. It’s time for copper to come home.”
It’s time to get back into copper stocks. Especially those with an American flavor.
Anticipating this, we recently put boots on the ground at one of the USA’s newest copper producers.
It’s already up 60% this year.
But it’s just getting started.
We knew the value of American copper long before this tariff run started.
That’s why we made this site visit. — to show you firsthand the value being created and the profit potential.
Copper is the newest Trump trade.
And it’s moving fast.
Call it like you see it,
Nick Hodge
Publisher, Daily Profit Cycle