GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Copper's structural deficit does not yet look priced in, with the copper/gold ratio still near multi-decade lows. JPMorgan forecasts a 330kt copper deficit in 2026, AI data centers may need over 1 million tons a year by 2030, EVs use about 4x the copper of gas cars, new mines take 15-20 years to build, and ore grades have declined for decades. x.comÂ
McEwen Mining's Los Azules copper project is a super-mispriced, high-quality asset, offering a copper angle on top of gold exposure. Whether the gold mining business itself is good is more doubtful, as a reply challenged and the author conceded. x.com x.comÂ
Southern Copper sits at the bottom of the global copper cost curve, which has kept it profitable through every downturn. Byproduct sales of molybdenum, zinc and silver from the same ore cut its net cost to 5 cents a pound last quarter. Over 21 years its worst net margin was +12.7%, while Freeport-McMoRan's was -82.7% in 2015; when prices fall, higher-cost mines slip into losses while Southern Copper stays above the line. x.com x.comÂ
Copper is one of the clearest trades over the next three years because supply is worse than most realize while AI accelerates demand. Chile, about a quarter of global production, just hit a nine-year production low, and copper miners have held up far better than silver and gold. Deutsche Bank forecasts copper soaring 50% to $22,050 a ton. x.comÂ
Copper miners should catch up to copper once oil comes down and logistics chains reopen. Supply pressure plus AI demand have created a perfect storm that pushed copper to new all-time highs. The pattern target is 115, with 92 as the breakout line. x.comÂ
Southern Copper's chart looks good for a move above $200 in May, with $2.3 million of June $200 calls coming in. x.comÂ
Copper could see extreme demand from the AI buildout over the next few years, enough that $8,000 may end up being the Wave 5 target zone. x.comÂ
Copper miners stand to benefit from a massive undersupply of copper right now, making the copper miners ETF a candidate for selling puts. x.comÂ
Southern Copper is outperforming copper itself thanks to operating leverage, as AI and grid demand push copper toward a widening deficit. Copper gained about 50% over the past year to a record near $14,545 per tonne in August, supported by demand from AI data centers and power grid expansion, while major producers cut output, pushing the market toward a deficit expected to widen through 2030. Southern Copper has the highest momentum rating among US mega-caps. x.comÂ
Copper miners stand to benefit as electrification of everything requires huge amounts of copper, and a supply crunch is imminent. x.comÂ