iShares Copper and Metals Mining ETF

ICOP

Market cap $428M

ETFs like COPX are gaining attention as copper outpaces gold and silver, fueled by AI data center demand and a bullish long-term supply-demand outlook.

I recommend the iShares Copper and Metals Mining ETF with a Buy rating, driven by robust copper demand from power infrastructure and data centers. ICOP benefits from a structural supply-demand gap, with copper supply projected to fall short by 10 million metric tons by 2040. Top holdings like FCX and AAL are executing growth initiatives and cost controls, positioning ICOP for strong cash generation.

AI-driven demand and tight supply pushed copper above $12,000 a ton, setting the stage for diversified copper ETFs like COPX as a 2026 trade.

The iShares Copper and Metals Mining ETF is heavily weighted to copper but also has some iron ore and gold exposure. ICOP's 27.46x P/E is driven by copper stocks, reflecting high valuations associated with the well-understood electrification trends and spot price lift due to tariff speculation. Copper remains strong due to electrification demand and supply constraints, while iron ore faces headwinds from Chinese pressure on iron ore sellers as the major global steel producer.

Copper's bullish trend is supported by technical and fundamental factors, with global deficits expected to persist into the 2030s. U.S. tariffs have caused extreme volatility and a shift of copper inventories from LME to COMEX warehouses, distorting traditional price relationships. Freeport McMoRan shares experienced sharp volatility due to Indonesian production issues, but Citi upgraded FCX on expectations of $12,000 copper in 2026.

Copper ETFs have seen a surge in investor popularity, driven by geopolitical tensions and recent tariff-related news. President Trump declared a 50% tariff on copper.

As the world hurtles toward an electrified future, the copper market stands at a crossroads.

Look at ETFs to capitalize on the red metal's bullish trend, driven by renewed investor demand and the Fed's interest rate cut.

Copper prices have surged Tuesday, reaching their highest levels in nearly six weeks, according to CNBC. In New York, copper for September delivery briefly touched $4.3065 per pound on Tuesday, the highest since mid-July, before settling at $4.2365, up 0.4% for the day.

Halfway through the year, thematic equity ETFs have exhibited wide levels of dispersion but continue to capture the market's attention heading into the second half of 2024.