Copper's a red hot bet for the rest of 2025

News.com.au

02-07-2025

Copper prices tipped to stay high through the second half of 2025
Red metal has turned into a hot commodity play, with M&A and big capital raisings showing investors are laser-focused on it
Hillgrove Resources the most undervalued option on the ASX, says Bell Potter
The copper price recently hit US$10,000 per tonne for the first time this year and analysts see further upside in the coming months.
Copper has staged a strong recovery since April, when it dipped to around US$8500/t following the announcement of US President Donald Trump's Liberation Day tariffs.
Last week, Goldman Sachs said the Section 232 investigation into US tariffs was driving an unusually wide gap between COMEX prices in New York and and London Metal Exchange prices, which had resulted in the US 'over-importing' roughly 400,000 tonnes of copper since the start of the year.
'US inventory has risen to over 100 days' worth of consumption, up from just 33 days at the beginning of the year,' the bank said.
'As a result, the ex-US copper market has tightened, causing fears of a regional copper shortage despite the global market being in surplus.
'The front of the LME curve has tightened substantially, with the LME cash contract briefly trading over US$10,000/t on June 23 and has traded at a US$95-379/t premium to the three-month contract week.'
As a result of fears of a shortage outside the US, Goldman Sachs lifted its December 2025 half LME copper price forecast to an average of US$9890/t, a decent uplift from its previous forecast of US$9140/t.
'We expect the copper price to rise to a peak for the year of US$10,050/t in August due to (1) the tariff-driven reduction in ex-US stocks, and (2) China sentiment and activity remaining relatively resilient (for now), before declining to US$9700/t by December,' Goldman said.
'The expected decline reflects our base case (80% probability) of a 25% tariff being put in place on US copper imports by September, but a later than expected tariff implementation could keep LME prices higher for longer.'
'Scramble' is on
Australia's newest copper producer, Bill Beament's Develop Global (ASX:DVP), last week raised $180 million to fuel its copper growth ambitions.
Beament said the level of interest in its now suspended sale process for a minority interest in its Woodlawn mine in New South Wales indicated that a 'scramble' for copper offtake was unfolding.
'It has become increasingly obvious to us that there is a window of lucrative opportunity in the copper and base metals space generally,' he said.
'There is a global race on to secure offtake of these crucial metals, particularly from tier-1 locations, and we are in the box seat to take full advantage of this opportunity.'
That scramble is evident in the bidding war unfolding for New World Resources (ASX:NWC).
After being virtually unloved for most of last year, the copper developer finds itself at the centre of a three-way tussle between AIM-listed Central Asia Metals and US private equity fund Kinterra Capital.
New World's Antler copper project in Arizona has a resource of 11.4 million tonnes at 4.1% copper equivalent, making it one of the highest-grade copper deposits in North America.
Antler has been designated as a Fast-41 Transparency Project by the US government, keeping the project on track for first production in 2027.
At this stage, New World is backing Central Asia's bid, which was increased to 6.2c per share, from the original bid price of 5c per share, trumping Kinterra's 5.7c per share bid.
However, Kinterra holds more than 19% of New World and has made an application to the Takeovers Panel, indicating that there may be more to play out in the saga.
Copper miners making hay
There's still only a handful of copper producers on the ASX and soon to be one less, with MAC Copper (ASX:MAC) set to be snapped up by South Africa's Harmony Gold for US$1.03 billion.
Market leader Sandfire Resources (ASX:SFR) is trading at close to all-time highs, its market capitalisation pushing through $5 billion in the process.
Last week, AIC Mines (ASX:A1M) secured a US$40M prepayment facility linked to an offtake agreement with Trafigura and raised $55 million to fund its new Jericho mine and expand the Eloise plant in Queensland.
According to recent research from Bell Potter Securities, the cheapest ASX-listed copper miner on an enterprise value basis is South Australian producer Hillgrove Resources (ASX:HGO).
Its market cap is less than half of AIC's, despite the two companies having similar production profiles this year.
Hillgrove operates the Kanmantoo underground copper mine in South Australia, where it has been quietly ticking off milestones in its aim to become a mid-tier copper producer.
The mine hit commercial production a year ago and achieved record production of 2952 tonnes of copper in the March quarter, generating $12.7 million of mine operating cashflow.
Earlier this year, Hillgrove raised $18 million to accelerate the development of the Nugent deposit and increase exploration.
That strategy is already paying off, with Hillgrove announcing last week that development rates at Nugent had outperformed expectations, delivering the first development ore 3-6 months ahead of plan.
The Nugent development ore has been delivered to the mill ahead of first stoping ore in the December quarter.
Hillgrove said the early milestone provided operational flexibility ahead of a planned increase in mill throughput from the current 1.4Mt per annum run-rate to 1.7-1.8Mtpa in the first half of next year.
In the meantime, production for the month of June was expected to be slightly lower at 750-800t of copper as the company prioritised development and deferred high-grade stopes.
Hillgrove said the approach would position the company for a stronger, more consistent performance in the second half of the year and beyond.
The company maintained full-year guidance of 12,000-14,000t of copper.