Under the Radar: Navigating the Copper Crunch Amidst Tariff Turbulence

Often as we go through life we find the need for mum to be the word.

In 1967 a young Dusitn Hoffman was told in no uncertain terms that Plastics was the word.

According to the 1976 movie Grease was the word.

Today the word is tariff.

Wall Street and old Washington has gotten far more of this word than they expected or wanted since Donald Trump came into office.

Apparently, they thought then candidate Trump was kidding when he talked at length about his plans to use aggressive tariffs to reshape global trade policies bringing in revenue.

I am not a fan of tariffs and can find little historical evidence to suggest that this is a great idea, but I had little doubt that once elected President Trump would follow through on his strategy.

This has created a new equation for Wall Street to follow.

Tariffs announced=Risk off,

Tariffs delayed=Risk On.

One of the administrations' most recent tariff announcement has the potential to create an enormous amount of wealth for investors willing to buy in as  stocks impacted by the new fees.

President Trump recently announced plans to impose 25% tariffs on copper imports.

Copper miners have sold off slightly, but I expect this to accelerate as the new taxes are actually implemented in the weeks ahead.

A steeper downturn will be a massive buying opportunity.

Copper is a backbone of the world we live in and has a wide range of uses.

Copper demand is not just growing – it is accelerating from multiple directions simultaneously. The traditional drivers remain intact: construction, manufacturing, and infrastructure in emerging markets like India and Southeast Asia continue to consume massive quantities. But what is really changing the game is the convergence of three unstoppable trends:

1. The Energy Transition: EVs use 2.5-4x more copper than regular cars. Wind turbines? Packed with copper. Solar farms? Same story. Grid upgrades to handle all this new capacity? You guessed it – copper everywhere.
2. Data Infrastructure: The explosion of AI, data centers, and 5G is creating another copper-hungry monster that few analysts are properly accounting for.
3. Supply Constraints: Meanwhile, the world’s biggest copper mines in Chile and Peru are aging, facing lower ore grades, water shortages, and labor disputes. Getting new mines online takes 7-10 years even when everything goes right – which it rarely does.

According to multiple industry analyses, we are looking at potential copper deficits by the late 2020s that could hit 5-8 million tonnes annually by 2035. For perspective, the entire global copper market today is only about twenty-six million tons.

This is not just another commodity cycle. It is a structural shift that has copper being called “the new oil” for good reason.

Here are the three stocks that have the potential to deliver massive gains for patient aggressive investors :

Freeport-McMoRan FCX
The undisputed king of publicly traded copper producers. FCX boasts a globally diversified portfolio anchored by the legendary Grasberg mine in Indonesia – one of the highest-grade, lowest-cost operations on the planet.

What makes Freeport compelling:

• Scale and resource depth unmatched among Western miners
• Dramatically improved balance sheet with minimal debt
• Strategic U.S. assets gaining importance as domestic supply becomes a national security concern
• Cash flow machine with both base and variable dividends

The underground expansion at Grasberg is a multi-decade growth engine that should deliver high-grade copper at remarkably low costs. Management has shown admirable discipline, focusing on optimizing existing assets rather than splashy, overpriced acquisitions.

Southern Copper SCCO
If you are looking for pure copper leverage with massive reserves, Southern Copper is your play. With over seventy million tons of proven and probable reserves, SCCO has the longest mine life among major copper producers – we are talking decades of production visibility.

The Grupo México-controlled miner operates primarily in Peru and Mexico, with a fully integrated model spanning mining, smelting, and refining. Its growth pipeline could potentially increase production from around 950,000 tons to 1.5 million tons by 2030.

The company’s cost position is stellar, with copper cash costs typically below $1.00/lb. net of byproducts. This supports EBITDA margins that frequently exceed 50% – exceptional for a mining operation.

The main risk? Political and social license challenges in Peru, where the flagship Tía María project has been delayed for over a decade due to local opposition.

Lundin Mining LUNLUNMF
For those seeking a mid-tier option with solid upside, Lundin Mining deserves attention. This copper-focused diversified miner offers leverage to copper prices without the extreme market cap of the majors.

Lundin’s portfolio includes:

• Candelaria (Chile): A flagship copper-gold mine producing steady cash flow
• Chapada (Brazil): A copper-gold operation with expansion potential
• Zinkgruvan (Sweden): A long-life zinc-lead-silver mine that adds diversification
• Josemaria Project (Argentina): A major copper-gold development that could boost copper output by 30-40%

The Lundin family’s long-term presence ensures alignment with shareholder interests, and the company has a proven track record of value-accretive acquisitions. Its balance sheet remains in good shape, with moderate debt levels and strong cash generation.

The Big Picture
Make no mistake: the copper market is not just facing a typical cyclical upturn. The combination of accelerating demand from electrification, green energy, and data infrastructure, coupled with chronic underinvestment in new supply, points to a potential shortage that could make the 2000s commodity supercycle look tame by comparison.

S&P Global has called the coming copper shortage “unprecedented,” warning that without significant investments now, the world could face chronic undersupply just as clean energy and digital infrastructure deployment peaks.

Tariffs may hurt profit margins and stock prices in the short run but will not slow demand or magically create new supply.

Buying copper on down days or selling cash secured puts to back into the stocks (the ones that are optional) should be a winning strategy for investors willing to embrace volatility driven by the current word of the day.