Three Reasons Why Copper Stocks have Soared 73% in 2021

  • Investing.com
  • Stock Market News
Three Reasons Why Copper Stocks have Soared 73% in 2021
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- Copper prices have risen to over $9,000 a metric ton for the first time in nine years. The world is facing a shortage of copper and the price for the metal is shooting through the roof around the world. The situation is no different in India. Stocks like Hindustan Copper Ltd (NS: HCPR ), Hindalco Industries Ltd. (NS: HALC ), and Vedanta Ltd (NS: VDAN ) have seen their prices move in tandem with the global copper rally.

Hindustan Copper Ltd (NS: HCPR ) has risen over 73% since December 31. It is currently trading at Rs 105.9 compared to Rs 61.15 on December 31. Hindalco has risen 35% to Rs 324 today compared to Rs 240.55 on December 31, and Vedanta is at Rs 207 today, up almost 29% from Rs 161.5 on December 31.

The major reasons for this are:

  1. Chinese buying: China is buying up copper-like nobody’s business. There is a huge demand for copper and it has met a huge shortage. Goldman Sachs Group Inc (NYSE: GS ) has warned of a historic shortage with “the market now on the cusp of the tightest phase in what we expect to be the largest deficit in a decade” as Chinese buying “triggers the next leg higher”. Goldman says they expect copper prices will near a record very soon.
  2. Demand for renewable energy: The world is adopting renewable sources of energy at breakneck speed. And guess which metal is very important as a raw material? That’s right, it’s copper. As demand for renewable energy grows, so does the demand for copper.

Trillions of dollars in stimulus: Governments across the world are unleashing stimulus packages like never before. Commodity prices are going up and copper is one of the main beneficiaries in this space.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100

Related Articles