2 Stocks To Buy As Copper Breaks $4 For The First Time In 9 Years

Copper futures crossed the $4 mark on February 19, their price highest level since September 2011. This can be attributed primarily to rebounding industrial activity. Economic re-engagement in China is one of the key drivers behind the copper price rally; the country imports approximately 50% of global copper output.

With broad applications in the clean energy industry, copper’s rally is expected to continue in the coming months. Also, President Biden’s $2 trillion clean energy proposal is expected to be a major boost for copper prices. According to the International Copper Study Group, global copper output is expected to rise 4.5% year-over-year to approximately 21.80 million tonnes in fiscal 2021.

The demand for copper should push its price up significantly as the world focuses on the clean energy revolution in the second half of 2021, following the vaccination of a significant portion of the globe’s population. Moreover, with China and India ramping up their copper inventories amid recovering industrial and manufacturing production levels, we think BHP Group Limited (BHP - Get Rating) and Vale S.A. (VALE - Get Rating) should generate robust profits in the future.

BHP Group Limited (BHP - Get Rating)

Formerly known as BHP Billiton Plc, BHP is a global resources company. It is a producer of various commodities, including iron ore, metallurgical coal, copper, and uranium. Its segments include Petroleum, Copper, Iron Ore, and Coal. The company extracts and processes minerals, oil, and gas from its production operations, which are located primarily in Australia and America. BHP manages product distribution through its global logistics chain, including freight and pipeline transportation.

BHP has signed a memorandum of understanding with JFE Steel, a leading Japanese steel producer, to jointly study technologies and pathways capable of making material reductions to greenhouse gas emissions from the steelmaking process. The company has also signed a renewable power purchasing agreement (PPA) with Risen Energy. The agreement is expected to help BHP reduce emissions from electricity use at its Nickel West Kwinana refinery by up to 50% by 2024, based on financial year 2020 levels.

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