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How To Play Copper Long Term Amid A Low Prices Environment

August 19, 2015 1:35 pm
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Copper mining stocks are down big this year. The iPath Bloomberg Copper Subindex Total Return Sub-Index (NYSE: JJC) fell more than 21 percent year-to-date, the Global X Copper Miners ETF (NYSE: COPX) fell almost 30 percent and the First Trust ISE Global Copper Index Fund (NASDAQ: CU) by more than 28 percent.

With stock prices down so much, could it be time to buy some copper stocks for the long haul? Are attractive entry points open at the main companies in the industry?

The Copper Motif

Motif Investing constantly looks for “trends, ideas and world events that could create an investment opportunity,” and then picks 10 to 30 related stocks to build portfolios around, weighing them based on their exposure to the coinciding idea, event or trend.

For copper, Motif Investing has created a portfolio focused on copper mining companies that “report proven and probable copper reserves.” According to the people behind the motif, copper has a “reputation for predicting global economic activity, especially in developing economies. For example, copper fell before the start of the credit crisis, and rebounded at the end of 2008—several months before markets started recovering.”

Related Link: Freeport-McMoran Could Double On Copper, Oil Recovery And Mining Revamp

The company goes on to explain that, “China already surpassed the US over a decade ago to become world’s largest copper consumer. China accounts for approximately 40 percent of the world's demand for metal and that’s expected to rise 48 percent by 2020. India’s copper consumption is expected to increase five-fold by 2020, to approximately 3 million tons a year.”

So, without further ado, let’s take a look at the companies in this portfolio, aimed at profiting from a surge in copper prices over the long term.


  • 20.9 percent: BHP Billiton Limited (ADR) (NYSE: BHP), down 22.4 percent year-to-date
  • 20.9 percent: Rio Tinto plc (ADR) (NYSE: RIO), down 18 percent
  • 20.7 percent: Southern Copper Corp (NYSE: SCCO), down 4.3 percent
  • 9.9 percent: Teck Resources Ltd (USA) (NYSE: TCK), down almost 52 percent
  • 9.8 percent: Vale SA (ADR) (NYSE: VALE), down 38 percent
  • 9.0 percent: Turquoise Hill Resources Ltd (NYSE: TRQ), flat year-to-date, down almost 10 percent over the past 12 months
  • 8.8 percent: Freeport-McMoRan Inc (NYSE: FCX), down more than 57 percent

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