3 Copper Stocks To Buy As Goldman Sachs Raises Price Target

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Copper production was hit seriously by the COVID-19 pandemic last year but has bounced back and is poised to grow significantly this year. However, higher demand is driving a price increase in the metal. Since copper is an important metal used in technologies for sustainable energy, it is likely to play a vital role in the global drive to fossil fuels with renewable energy sources.

According to a recently released Goldman Sachs report, an expected spike in demand and low supply could drive up the price of copper from the current approximately $9,000 per ton to $15,000 per ton by 2025. Also, President Biden’s $2 trillion-plus proposed jobs package, coupled with a global push toward a cleaner future as the Paris Agreement nears its deadline, should help the industry thrive this year and beyond. The copper mining market is expected to reach $76.76 billion by 2022.

The copper industry’s solid performance over the past year is evident in Global X Copper Miners ETF’s (COPX) 192% returns over this period versus the SPDR S&P 500 Trust ETF’s (SPY) 44.9% gains. Keeping these factors in mind, we believe BHP Group (BHP), Rio Tinto Plc (RIO), and Anglo American Plc (NGLOY) are well-positioned to benefit this year and beyond.

BHP Group Ltd. (BHP)

Based in Melbourne, Australia, BHP is a leading natural resources company that operates through Petroleum, Copper, Iron Ore, and Coal segments. The company is also involved in the exploration and mining of copper, silver, zinc, molybdenum, uranium, gold, and energy coal.

This month, BHP, along with Oldendorffs and GoodFuels, conducted its first marine biofuel trial in Singapore to understand the functioning and importance of biofuel as a low-carbon fuel for BHP’s future key shipping routes. This collaboration should give BHP entry to the Asian market and drive business growth.

BHP’s profit from operations increased 17% year-over-year to $9.75 billion in the half year ended December 31. The company’s net operating cash flow increased 26% from the year-ago value to $9.37 billion, while its underlying EBITDA increased 21% year-over-year to $14.68 billion over the period.

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