October proved to be a pivotal month for copper and copper-linked shares, with a number of elements contributing to the market’s sharp transfer. Initially, the sector slid on actual macroeconomic worries, however then turned sharply larger as underlying provide issues and a weaker U.S. greenback reignited investor optimism. The consequence: inventory charts of many copper miners and producers lit up, reflecting that shift. So, the place ought to buyers look?
What occurred?
In the beginning of October, copper costs have been nonetheless below stress due to three main headwinds. First, demand issues in China weighed closely. Whereas China stays the world’s largest copper client, manufacturing softness and weak new orders dampened expectations for near-term copper use. Then, the U.S. greenback began to get better on renewed hawkish speak from the Federal Reserve and better bond yields. This tends to harm dollar-priced commodities like copper. Lastly, inventories and ahead curves signalled that the market may nonetheless be pretty comfy on provide. Subsequently, a few of the upside was already within the value, dampening speedy enthusiasm.
Then, the tone modified mid-month and thru late October as copper got here again into the highlight. Main mine disruptions in Chile, Indonesia, and the Democratic Republic of the Congo triggered alarms in regards to the future availability of refined copper and concentrates. On the similar time, futures curves and stock information started to tighten, whereas the U.S. greenback’s restoration paused and threat sentiment improved. All of this creates a “provide scare” narrative, driving copper upwards.
For copper shares, this implies a double profit. On one hand, rising copper costs enhance the income and margins for mining corporations, making future earnings look stronger. Alternatively, investor sentiment shifts from warning to “concern of lacking out,” pushing flows into metallic miners’ equities. So, the place ought to buyers purchase in?
LUN
For those who’re seeking to trip a rebound in copper, Lundin Mining (TSX:LUN) presents a powerful case. The basics align with the copper bull thesis. Lundin Mining is a producer of base metals with a heavy emphasis on copper. In its June 2025 strategic replace, the copper inventory laid out plans to extend copper manufacturing considerably through brownfield expansions at its Candelaria, Caserones and Chapada operations. It goals for an extra 30,000 to 40,000 tonnes per 12 months over the subsequent three to 5 years.
Moreover, price construction and timing are working in its favour. In the identical replace, the copper inventory famous it had diminished its money price steerage for copper. Decrease prices imply that when copper costs rise, margin growth could possibly be extra pronounced. This tends to drive share-price upside in mining shares.
Then there’s valuation and upside potential. Whereas the copper inventory’s shares rallied considerably in current months, one narrative nonetheless sees Lundin as modestly undervalued. There are concerns, after all. Lundin’s development ambitions depend on the profitable execution of its growth tasks and beneficial metallic pricing. If copper stays weak or the corporate hits delays, the anticipated beneficial properties could possibly be muted. But whereas buying and selling at 21 occasions future earnings, it appears helpful at these ranges.
Backside line
Altogether, Lundin Mining is a stable funding thought within the present setting. It combines a copper-heavy portfolio, cost-reduction efforts, clear manufacturing development plans, and beneficial macro tailwinds. If copper rebounds, Lundin could possibly be an enormous benefactor. That mentioned, the excessive expectations baked into the share value imply that buyers want consolation with execution threat, commodity cycles and company-specific challenges. All in all, make sure you do your personal analysis earlier than making any funding.
