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Thinking of buying back ASX copper shares? Maybe now is the time to do it.
An expert would be seizing the metal and the stocks that produce it.
This is despite the fact that the three-month copper contract fell from around US$9,700 per tonne at the same time last year to around US$7,850 per tonne at Friday’s close. London Metals Exchange.
So why might ASX copper-producing stocks be worth looking at right now? Let’s find out.
Is the future bright for ASX copper stocks?
Newton’s portfolio manager Aron Pataki is bracing for tough times. The fund is turning away from global equities, reports the Australian Financial Reviewbut it doubles on a sector.
It’s goods. And copper in particular.
He likes the metal as an inflation hedge, protecting shareholder value in this inflationary environment and rising interest rates. Moreover, demand is expected to take off in the coming years.
Pataki said, courtesy of the publication:
Copper is a key ingredient in the electrification of the economy, in electric vehicles, smart grids, etc.
We believe that demand will be very strong over the next two years, while supply will be relatively limited. Commissioning a new mine takes five to seven years. There have been new ones released, but we don’t expect supply to increase.
It’s a view similar to this offered by S&P Global earlier this year.
He found that demand for copper will likely double over the next decade as the world strives to reach net-zero emissions by 2050, which will likely cause the deadline to be missed.
Perhaps unsurprisingly then, copper has been a major talking point among those interested in ASX stocks lately.
S&P/ASX 200 Index (ASX: XJO) resource giant BHP Group Ltd. (ASX: BHP) made a $25 per share bid for pure copper OZ Minerals Limited (ASX:OZL) last month. The offer was quickly rejected.
Meanwhile, Rio Tinto Limited (ASX: RIO) is working to recover the remaining stake in Turquoise Hill. Turquoise Hill is co-owner of the Oyu Tolgoi copper-gold mine.
Finally, the ASX 200 copper favorite Sandfire Resources Ltd. (ASX: SFR) seems to be having a moment in the sun. Its stock price is up nearly 9% in the past week.