Copper Teetering on a Breakout: Part III

Today, I’ll continue our deep dive into the copper market and explain why today’s setup is crucial for investors.

If you missed our last edition, you can check it out here.

That’s where I lay out the setup, the remarkable parallel from 20 years ago, and factors that could drive copper much higher in 2025.

But there’s something else no one’s paying attention to, a factor that’s perhaps more important than all of the others combined:

Copper’s forgotten link to national rearmament

You see, copper is used extensively across munitions and other military hardware.

That’s why the biggest copper booms in history have occurred during major conflict.

To be clear, I’m NOT hoping we’re heading into another major global conflict.

However, as copper moves higher, it’s crucial to unpack what might drive it higher beyond the simplistic mainstream narrative, like tariffs and US copper imports.

History shows that war and national rearmament are the single most important drivers of demand for copper.

To show you what I mean, here’s a chart of copper prices going back almost 180 years:

As you can see, copper’s most significant spikes are synonymous with war.

It’s a forgotten link, perhaps because the last great copper boom was driven by Chinese industrial growth.

Back then, copper surged to over $4.60 per pound, peaking in 2011.

Yet, adjusted for inflation, the early 2000s commodity boom was a whimper compared to what happened during ‘the war years.’

In real terms, copper skyrocketed to over $7 per pound during WWI, almost DOUBLE the levels achieved in the China fuelled commodity boom of the early 2000s.

It also surged during the US Civil War, the Korean War, and the Vietnam War in the 1970s.

But as you might have noticed from the chart above, WWII was an exception.

Copper remained flat after the US government fixed prices to extinguish speculation in this critically important ‘war’ metal.

So, what’s history telling us?

Metals perform extremely well amid political chaos and geopolitical chest beating.

Given that the world has fallen into a dark phase of weakened diplomacy, copper’s recent spike is perhaps concerning for global peace.

This might offer some explanation for the big move in 2025.

But as I’ve shown you, this could still be the early phases of something much bigger…

Last month, Trump made threats to abandon NATO.

That means, when Europe needs its help most, Uncle Sam is NOT offering Europeans guaranteed protection.

That sent EU leaders into a frenzy last month.

In response, Germany announced it would DOUBLE military spending, up a whopping 5% of GDP.

But that’s only the first step.

German leaders have put in motion their desire to become ‘the backbone of defence in Europe.’

Effectively doubling down on their military spending to fill the US-NATO void.

Rearmament across Europe looks certain.

And it follows announcements by China, the world’s second-largest military, last month, announcing big increases to its military budget.

Whichever way you square it, the outlook for copper is strong

I suspect higher prices will combine all the demand factors I’ve outlined this week.

That perhaps makes today’s copper setup even more enticing than the early 2000s boom, which was fuelled exclusively by Chinese growth.

But the key point…

Global capital looks set to pivot back to commodities after a decade-long hiatus.

Just like it did 20 years ago.

I believe we’re approaching a historic juncture in this market.

Last month, I issued two buy alerts to my premium members at Mining Phase One. Ramping up our exposure to copper.

Copper now makes up almost half of our portfolio at MPO!

With a focus on juniors, Mining Phase One is the place to be if you truly believe in the copper opportunity.

You can find out more here.

But if you want to play it safe and limit your exposure to producers, that’s what I offer readers at Diggers & Drillers.

This is our entry-level service, which covers larger cap stocks across the mining arena.

You can find out more here.

But whatever direction you choose, producers or the more speculative juniors, copper remains a core commodity in this commodity cycle.

I’ve shown you how Dr Copper can be used as a market bellwether, but to benefit from that knowledge, you need to understand the price action and be willing to invest accordingly.

Right now, copper is signalling strength.

2005 offered us the playbook on what could happen next.

Any pull-backs from here SHOULD be viewed as a buying opportunity.

Regards,

James Cooper,
Editor, Mining: Phase One and Diggers and Drillers

P.S. My colleague Callum Newman has his own take on the copper market, it’s well worth listening too, and you can access it here.