New Price Targets for Standout Copper Names as Tariffs Drive Surge

Some investors are pointing at the rising price of copper as an indication that global economic growth is about to surge. Is this positive outlook warranted?

Copper is known colloquially as "Dr. Copper," because it can sometimes be used to predict the overall health of the global economy. Since the start of this year, the price of copper has risen by about 28%.

When copper prices are rising, an upswing in manufacturing or construction activity could be imminent. Those economic activities could take place anywhere in the world, but copper is most closely associated with China, the world’s largest copper consumer.

Despite copper’s recent rally, there are two reasons to be skeptical about the red metal’s ability to maintain its current momentum. 

First, copper is running smack into resistance from May 2024 (black dotted line below). This means that copper could pull back in the near term for purely technical reasons. On the other hand, if copper breaks above $5.20, it would be a show of strength. 

The second reason why copper may be unable to maintain its trajectory is because the current rally may be due to hoarding and increased purchases due to tariffs. The U.S. imports over 40% of the copper it consumes, so tariffs could have a big impact. 

Before deciding whether copper is rising due to an improving economic outlook or tariffs, understand that both of these things can be true. It’s possible that optimism about future growth and uncertainty over tariffs can coexist.

I examined the charts of numerous copper stocks and found two names that stand out:

1. Freeport-McMoran (FCX)

Freeport-McMoran is one of the world’s largest copper producers. In 2023, the Arizona-based mining company produced 4.2 billion recoverable pounds of copper.

Freeport is my top pick among copper miners. The stock has gained about 20% over the past two weeks, and just closed at a three-month high. 

Freeport-McMoran still needs to climb above its 200-day moving average (red), currently located near $43.39. If the stock can vault that obstacle, it could reach my new price target of $50.

2. VALE S.A. VALE

In addition to being a major copper provider, Brazil’s Vale is the world’s largest producer of iron ore. Vale has gained about 12% year to date, and could be on the verge of a breakout. 

Vale is trading just below its 200-day moving average (red), which sits at $10.23. If Vale can close above $10.25, not only will the stock surmount that obstacle, it’ll also reach its highest price since November. 

My price target for Vale is $12.

At the time of publication, Ponsi was long FCX and VALE.