Copper may not glitter like gold, but right now it’s the metal with the best story in town.
A series of mine disruptions, most notably at Grasberg in Indonesia, has flipped the copper market from surplus to deficit, according to new forecasts from JPMorgan’s commodities team.
That could mean higher prices ahead, and investors are being urged to stay selective as the market tightens.
The American bank's analysts still favour Antofagasta PLC (LSE:ANTO) as the pick of the bunch.
The Chilean miner, listed in London, remains a “core holding” with copper volumes expected to rise by roughly 30% through to 2028.
On those numbers, its valuation looks set to come down sharply, from about 12 times forecast earnings in 2025 to nearer six times three years later.
JPM has raised its price target to £35 a share, up from £25, and kept it on its Analyst Focus List. The stock isn’t cheap, but the analysts view it as a lower-risk way to play copper compared with Glencore, which they have downgraded to neutral.
First Quantum Minerals (TSX:FM) is back in favour too. The Canadian group’s shares have had a rough ride since Panama pulled the plug on its flagship mine, but JPMorgan is now assuming production will restart by mid-2027, albeit with a higher tax take for the government.
That assumption lifts the analysts’ fair value to C$42 a share, about 30% above the current price, and prompts an upgrade to overweight.
Norsk Hydro, the Norwegian aluminium producer, is also worth watching. JPM expects a steady third quarter but has placed the stock on “positive catalyst watch” ahead of its November investor day, citing the prospect of lower capital spending and possible upgrades to its fourth-quarter profit forecasts.
Overall, the bank remains upbeat on base metals, advising investors to back miners with stronger volume growth and improving valuations. Antofagasta, First Quantum and Norsk Hydro top its list; Boliden, by contrast, is one to treat with more caution.