Advisors and investors looking to keep a close eye on the metal markets would be remiss not to be interested in how copper has been doing as of late. 

The price of the red metal has continued to approach new record highs, buoyed by a variety of applicable factors. However, given the recent selloff in gold and silver, some investors may be curious whether the momentum in the copper space is built to last. 

Fortunately, the factors driving the copper price surge are driven primarily by supply/demand fundamentals. Copper has a critical role in a range of applications, including power grids, electrification, and AI infrastructure. The AI theme is especially critical, as investment signals indicate that AI infrastructure expansion and data center demand won’t be slowing down any time soon. 

Demand for copper may be high, but can supply keep up? While the exact number may vary, several projections expect copper shortfalls of 7 to 10 metric tons by 2040. And with supply disruptions continuing to pop up, optimism over the future of copper stockpiles is, well, in short supply. That being said, these supply deficits—along with persistent demand for the red metal—could create a potential portfolio opportunity for advisors and investors. 

“Looking at this from an investment standpoint, there’s a significant opportunity in the copper miner space, because they’re the ones that are in the front lines of increasing this primary production, and that’s where we expect to see a lot of the investment happen over the next decade to two decades,” noted Steven Schoffstall, Managing Partner at Sprott & Head of ETFs at Sprott Asset Management USA, in a recent interview. 

COPP and COPJ: Two Ways to Ride With Copper Miners

Sprott offers several avenues to capture opportunities in the copper mining industry through the ETF wrapper. One would be through the Sprott Copper Miners ETF (COPP).

COPP provides pure-play exposure to the copper industry as a whole, investing in both physical copper and copper miners. This approach can help address the broader growth in the copper industry while remaining exposed to copper mining companies that may see rising demand in the years to come. 

Alternatively, the Sprott Junior Copper Miners ETF (COPJ) could also offer a compelling use case. COPJ focuses its investments on the smaller copper miners within the industry. Given that demand for copper won’t likely slow down any time soon, investing in smaller copper miners now might offer strong long-term growth. 

For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Content Hub.

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Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.

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Exchange Traded Funds (ETFs):  SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM, SGDJ, SLVR, GBUG, METL

Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP.

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