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>We update the expansion plans of all listed companies under our coverage one by one to capture the extent of the copper supply shortages the world will experience. </li>
<li>These listed companies account for ~40% of the global supply, providing a robust sample for analyzing current supply issues, as copper is set to exceed USD 12,000/ton. </li>
<li>We like copper names with a solid supply story and low on the cost curve, 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> </li>
</ul>


We update the expansion plans of all listed companies under our coverage one by one to capture the extent of the copper supply shortages the world will experience. 
These listed companies account for ~40% of the global supply, providing a robust sample for analyzing current supply issues, as copper is set to exceed USD 12,000/ton. 
We like copper names with a solid supply story and low on the cost curve, like Southern Copper (SCCO US) and Antofagasta PLC (ANTO LN) 


Copper Mine By Mine Supply Challenges For Everyone: Update As Copper Is Set to Break 12k USD/Ton

<ul>
<li>Copper inventory on the COMEX surpassed 400,000 tons on Friday, marking an increase of 330% from the beginning of the year, amidst speculation of a levy of tariffs.</li>
<li>The Department of Commerce has issued a proclamation imposing a 15% tariff in 2027, with the rate increasing to 30% by 2028, implying a LME-Comex Spread of &gt;3000 USD/ton.</li>
<li>In addition to the sucking up of copper inventory into the US, we have supply shortages (see: <a href="https://www.smartkarma.com/insights/grasberg-to-weigh-on-copper-supply-in-the-medium-term-march-to-12k-usd-ton" target="_blank" data-smartkarma-citation="insights:204971" rel="noopener">Grasberg To Weigh On Copper Supply In The Medium-Term, March To 12k USD/Ton</a> )</li>
</ul>


Copper inventory on the COMEX surpassed 400,000 tons on Friday, marking an increase of 330% from the beginning of the year, amidst speculation of a levy of tariffs.
The Department of Commerce has issued a proclamation imposing a 15% tariff in 2027, with the rate increasing to 30% by 2028, implying a LME-Comex Spread of &gt;3000 USD/ton.
In addition to the sucking up of copper inventory into the US, we have supply shortages (see: Grasberg To Weigh On Copper Supply In The Medium-Term, March To 12k USD/Ton )


Stockpiling of Copper in the Comex: A One-Year Trade, Inventories Now at 25% of US Demand

<ul>
<li>
<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> reported stellar earnings and execution in Q3 2025, with revenues/operating income up 15% and 21% YoY, respectively, beating street estimates by ~4-5%.</li>
<li>The company included slides in its presentation deck highlighting that the copper deficit could rise to 3 million tons by 2030e and 12.1 million tons by 2040e. </li>
<li>This would be led by a transition to EVs (electric vehicles), greater use of renewable energy with higher capex intensity, and other nascent areas of demand, such as AI infrastructure.</li>
</ul>



Southern Copper (SCCO US) reported stellar earnings and execution in Q3 2025, with revenues/operating income up 15% and 21% YoY, respectively, beating street estimates by ~4-5%.
The company included slides in its presentation deck highlighting that the copper deficit could rise to 3 million tons by 2030e and 12.1 million tons by 2040e. 
This would be led by a transition to EVs (electric vehicles), greater use of renewable energy with higher capex intensity, and other nascent areas of demand, such as AI infrastructure.


Southern Copper (SCCO US): Summary of The Copper To 12,000 USD/Ton and Beyond Thesis In Two Slides

<ul>
<li>In our previous insight <a href="https://www.smartkarma.com/insights/copper-to-end-the-year-with-seasonal-strength-onward-to-12-000-usd-ton" target="_blank" data-smartkarma-citation="insights:206735" rel="noopener">Copper To End The Year with Seasonal Strength: Onward To 12,000 USD/Ton</a>, we elaborated on the supply issues with copper production. </li>
<li>
<a href="https://www.smartkarma.com/entities/antofagasta-plc" target="_blank" data-smartkarma-citation="entities:21814:1" rel="noopener">Antofagasta PLC (ANTO LN)</a> has now guided production down to the lower end of the 660-700k range (we assume a midpoint of 680k), or 3%.</li>
<li>FY26 guidance was also soft (-4-5% from our expectations). We are seeing a spate of guidedowns and will need to monitor them to better understand the deficit situation. </li>
</ul>


In our previous insight Copper To End The Year with Seasonal Strength: Onward To 12,000 USD/Ton, we elaborated on the supply issues with copper production. 

Antofagasta PLC (ANTO LN) has now guided production down to the lower end of the 660-700k range (we assume a midpoint of 680k), or 3%.
FY26 guidance was also soft (-4-5% from our expectations). We are seeing a spate of guidedowns and will need to monitor them to better understand the deficit situation. 


Copper Production Disappointments Mount With Antofagasta (ANTO LN) Guidedown, Bullish To 12k USD/Ton

<ul>
<li>The US administration's addition of copper to the<a href="https://www.reuters.com/business/energy/trump-expands-us-critical-minerals-list-include-copper-metallurgical-coal-2025-11-06/" target="_blank" rel="noopener"> critical minerals list, </a>with a likelihood of a blanket 15% levy, has widened the spread between COMEX and LME once again. </li>
<li>Earlier, Trump had destroyed the spread in July by backtracking on the 50% tariff on copper, limiting it to value-added (see: <a href="https://www.smartkarma.com/insights/comex-spread-destroyed-by-trump-long-term-copper-still-great" target="_blank" data-smartkarma-citation="insights:196967" rel="noopener">COMEX Spread Destroyed By Trump, Long-Term Copper Still Great).</a> </li>
<li>We are bullish on copper. Recent supply shocks will push prices upwards to 12k USD/ton by year-end (<a href="https://www.smartkarma.com/insights/copper-to-end-the-year-with-seasonal-strength-onward-to-12-000-usd-ton" target="_blank" data-smartkarma-citation="insights:206735" rel="noopener">Copper To End The Year with Seasonal Strength: Onward To 12,000 USD/Ton</a> )</li>
</ul>


The US administration's addition of copper to the critical minerals list, with a likelihood of a blanket 15% levy, has widened the spread between COMEX and LME once again. 
Earlier, Trump had destroyed the spread in July by backtracking on the 50% tariff on copper, limiting it to value-added (see: COMEX Spread Destroyed By Trump, Long-Term Copper Still Great). 
We are bullish on copper. Recent supply shocks will push prices upwards to 12k USD/ton by year-end (Copper To End The Year with Seasonal Strength: Onward To 12,000 USD/Ton )


Comex-LME Trade Back In The Spotlight, Spread To Widen Again

United States

Southern Copper Corporation conducts mining operations in Peru and Mexico.  The Company owns and operates open pit mines and metallurgical complexes that produce copper, molybdenum, zinc, and precious metals.

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Southern Copper (SCCO US)

Copper Mine By Mine Supply Challenges For Everyone: Update As Copper Is Set to Break 12k USD/Ton

We highlight mine-by-mine issues plaguing each of the listed copper companies, resulting in supply being compromised by >3.5% setting the stage for...

Sameer Taneja

Stockpiling of Copper in the Comex: A One-Year Trade, Inventories Now at 25% of US Demand

The most recent bull case for copper is the Department of Commerce's expected 2027 imposition of a 15% levy on copper, which we have discussed,...

Sameer Taneja