Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>Pricing data now shows that the Copper-Aluminum price ratio is at its highest level, 4.3x, and a reversion to the mean is likely, suggesting a long aluminum, short copper trade. </li>
<li>The historic average has been 3.6x, and the lows have been at 2.75x. In all three instances in the last seven years, after touching 4.3x, mean reversion occurred.</li>
<li>Long-Term, we like copper fundamentals, and our favorite stocks are <a href="https://www.smartkarma.com/entities/ero-copper-corp" target="_blank" data-smartkarma-citation="entities:38695:1" rel="noopener">ERO Copper (ERO US)</a>, <a href="https://www.smartkarma.com/entities/antofagasta-plc" target="_blank" data-smartkarma-citation="entities:21814:1" rel="noopener">Antofagasta PLC (ANTO LN)</a>, <a href="https://www.smartkarma.com/entities/lundin-mining-corp-92352503-3781-4fcb-a4db-62e6f6343783" target="_blank" data-smartkarma-citation="entities:25356:1" rel="noopener">Lundin Mining (LUN CN)</a>, and <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" data-smartkarma-citation="entities:16279:1" rel="noopener">Southern Copper (SCCO US)</a> </li>
</ul>


Pricing data now shows that the Copper-Aluminum price ratio is at its highest level, 4.3x, and a reversion to the mean is likely, suggesting a long aluminum, short copper trade. 
The historic average has been 3.6x, and the lows have been at 2.75x. In all three instances in the last seven years, after touching 4.3x, mean reversion occurred.
Long-Term, we like copper fundamentals, and our favorite stocks are ERO Copper (ERO US), Antofagasta PLC (ANTO LN), Lundin Mining (LUN CN), and Southern Copper (SCCO US) 


Copper: The Continuous Rise Of Comex Inventories And The Mean Reversion Of Copper-Aluminum Price

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. We see global equities as being in a goldilocks scenario where market dynamics and technicals are arguably 100% bullish. Of course, at some point this almost too good to be true scenario is likely to result in a pullback, but for now we see no signs of this rally letting up.  In our December International Strategy, we highlight areas of the market where we see actionable opportunities in Technology, Consumer Discretionary, Materials and Manufacturing.

Our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. We see global equities as being in a goldilocks scenario where market dynamics and technicals are arguably 100% bullish. Of course, at some point this almost too good to be true scenario is likely to result in a pullback, but for now we see no signs of this rally letting up.  In our December International Strategy, we highlight areas of the market where we see actionable opportunities in Technology, Consumer Discretionary, Materials and Manufacturing.

Global Equity Strategy: Bullish Outlook Intact

In this report we lay out what we believe is a compelling case to add exposure to copper miners at current levels, highlighting the following actionable names: Freeport-McMoRan (FCX-US), Southern Copper (SCCO-US), OZ Minerals (OZL-AU), Antofagasta plc (ANTO-GB), KAZ Minerals (KAZ-GB), Aurubis AG (NDA-DE), Grupo Mexico (GMEXICOB-MX), Ivanhoe Mines (IVN-CA), First Quantum Minerals (FM-CA), Lundin Mining (LUN-CA), Hudbay Minerals (HBM-CA), Capstone Mining (CS-CA), Turquoise Hill Resources (TRQ-US, TRQ-CA), Taseko Mines (TGB-US, TKO-CA), and MMG Ltd. (1208-HK).

In this report we lay out what we believe is a compelling case to add exposure to copper miners at current levels, highlighting the following actionable names: Freeport-McMoRan (FCX-US), Southern Copper (SCCO-US), OZ Minerals (OZL-AU), Antofagasta plc (ANTO-GB), KAZ Minerals (KAZ-GB), Aurubis AG (NDA-DE), Grupo Mexico (GMEXICOB-MX), Ivanhoe Mines (IVN-CA), First Quantum Minerals (FM-CA), Lundin Mining (LUN-CA), Hudbay Minerals (HBM-CA), Capstone Mining (CS-CA), Turquoise Hill Resources (TRQ-US, TRQ-CA), Taseko Mines (TGB-US, TKO-CA), and MMG Ltd. (1208-HK).

Copper Miners Breaking Out Around The Globe -- Buy

<ul>
<li>We expect copper prices to remain elevated at over 13,000 USD/ton in the foreseeable future, leading to upgrades in the equities.</li>
<li>As highlighted in our earlier note, Copper Price Correction: Four Stocks To Look At, our top picks in the copper space: <a href="https://www.smartkarma.com/entities/ero-copper-corp" target="_blank" data-smartkarma-citation="entities:38695:1" rel="noopener">ERO Copper (ERO US)</a> and <a href="https://www.smartkarma.com/entities/lundin-mining-corp-92352503-3781-4fcb-a4db-62e6f6343783" target="_blank" data-smartkarma-citation="entities:25356:1" rel="noopener">Lundin Mining (LUN CN)</a>.</li>
<li>We also like <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" data-smartkarma-citation="entities:16279:1" rel="noopener">Southern Copper (SCCO US)</a> and <a href="https://www.smartkarma.com/entities/antofagasta-plc" target="_blank" data-smartkarma-citation="entities:21814:1" rel="noopener">Antofagasta PLC (ANTO LN)</a>, although they are bigger names with richer valuations. </li>
</ul>


We expect copper prices to remain elevated at over 13,000 USD/ton in the foreseeable future, leading to upgrades in the equities.
As highlighted in our earlier note, Copper Price Correction: Four Stocks To Look At, our top picks in the copper space: ERO Copper (ERO US) and Lundin Mining (LUN CN).
We also like Southern Copper (SCCO US) and Antofagasta PLC (ANTO LN), although they are bigger names with richer valuations. 


Copper: Remain Bullish Stocks, Copper Price To Stay Elevated At >13,000 USD/Ton

<ul>
<li>Copper prices continue to remain above 13,000 USD/ton despite a small correction. Stocks have declined much more amid market weakness, resulting in better risk-reward on copper names.</li>
<li>Stocks that stand out are <a target="_blank" rel="noopener">ERO Copper (ERO US)</a>, trading at 6.8x PE and 4.4x EV-EBITDA, and <a target="_blank" rel="noopener">Lundin Mining (LUN CN)</a>, 16.4x PE and 6.9x EV-EBITDA, for how cheap they are.</li>
<li>The bellwether copper pure plays are <a href="https://www.smartkarma.com/entities/antofagasta-plc" target="_blank" data-smartkarma-citation="entities:21814:1" rel="noopener">Antofagasta PLC (ANTO LN)</a> at 7.8x EV-EBITDA and <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" data-smartkarma-citation="entities:16279:1" rel="noopener">Southern Copper (SCCO US)</a> at 13.5x EV-EBITDA. All numbers based on FY26e copper at 13,000 USD/ton.</li>
</ul>


Copper prices continue to remain above 13,000 USD/ton despite a small correction. Stocks have declined much more amid market weakness, resulting in better risk-reward on copper names.
Stocks that stand out are ERO Copper (ERO US), trading at 6.8x PE and 4.4x EV-EBITDA, and Lundin Mining (LUN CN), 16.4x PE and 6.9x EV-EBITDA, for how cheap they are.
The bellwether copper pure plays are Antofagasta PLC (ANTO LN) at 7.8x EV-EBITDA and Southern Copper (SCCO US) at 13.5x EV-EBITDA. All numbers based on FY26e copper at 13,000 USD/ton.


Copper Price Correction: Four Stocks To Look At

United Kingdom

Antofagasta plc is a Chilean multinational conglomerate primarily focused on copper mining, with operations concentrated in Chile. The company operates four copper mines, producing copper cathodes and concentrates, along with gold, silver, and molybdenum as by-products. Additionally, it has a transport division providing rail and road cargo services for mining customers in northern Chile. Antofagasta was incorporated in London in 1888 and is headquartered in London, England.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Antofagasta (ANTO LN)

Copper: The Continuous Rise Of Comex Inventories And The Mean Reversion Of Copper-Aluminum Price

We highlight the increasing Cu-Al ratio in this insight and other KPIs influencing the copper trade. We also provide our top long-term picks in the...

Sameer Taneja

Global Equity Strategy: Bullish Outlook Intact

Our outlook remains bullish and we continue to believe that the path of least resistance is higher for global equities. In this report, we...

Vermilion Research

Copper Miners Breaking Out Around The Globe -- Buy

In this report we lay out what we believe is a compelling case to add exposure to copper miners at current levels, highlighting the following...

Vermilion Research

Copper: Remain Bullish Stocks, Copper Price To Stay Elevated At >13,000 USD/Ton

Risk-off rattles copper, but fundamentals intact. Record Q1s from SCCO, ANTO & LUN. Inventories peaking = bull cycle loading.

Sameer Taneja

Copper Price Correction: Four Stocks To Look At

We look at four stocks post the correction in share prices, provide a sensitivity analysis for different copper prices, and present a base-case...

Sameer Taneja

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)