Copper prices are hovering near record highs, spotlighting ASX mining giants as traders brace for increased demand from China. The London Metal Exchange (LME) three-month copper price is trading close to $US13,000 per tonne, keeping BHP and Rio Tinto among the most actively traded stocks on the ASX, according to ETF Shares chief investment officer David Tuckwell. “Copper continues to be the talk of the street,” he noted, highlighting the metal’s current prominence in market discussions.
Tuckwell explained the surge in copper prices is due to disproportionately large amounts remaining in US warehouses following tariff-related stockpiling last year under the Trump administration. This situation has resulted in lean ex-US copper inventories, meaning a sudden increase in Chinese demand could trigger a supply squeeze. With China’s economic outlook improving in 2024, traders are increasingly betting on a potential squeeze occurring.
Tuckwell pointed out a structural shift occurring within the Australian mining sector. Stricter environmental regulations in China are driving up demand for high-grade “green steel” feedstock, which Australian iron ore regions, such as the Pilbara, are not fully equipped to supply. Consequently, the industry’s centre of gravity is shifting towards Africa. This is leading major players like Rio Tinto, BHP, and Fortescue to pivot towards copper as a key driver of future growth.
