Here's Why Southern Copper Shares Popped Higher This Week
Key Points
Supply constraints and strong demand are supporting higher copper prices.
Major producers expect lower production volumes in 2026.
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Shares in Southern Copper Corporation (NYSE: SCCO) rose by 12.8% in the week to Friday morning. The move comes in a week when the price of copper briefly spiked to an all-time high of above $6.50 per pound on the London Metal Exchange.
The copper price spike is supported by fundamentals
As you can see below, it was a pretty good week for copper producers, including Southern Copper, Freeport-McMoRan (NYSE: FCX), and Rio Tinto (NYSE: RIO).
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SCCO data by YCharts
The moves are backed by a combination of supply tightening and solid, ongoing demand, increasingly supported by data center demand for power cabling and copper wire. Southern Copper's management estimates a market deficit of 320,000 tonnes in 2026, and it's notable that management expects its own copper production to decline by 4.7% to 911,400 tonnes, due to "lower ore grades at our Peruvian operation."
Freeport-McMoRan also expects lower copper sales volume in 2026, with its recently reduced forecast calling for 3.4 billion pounds of sales in 2026, compared to 3.6 billion pounds in 2025 – a difference of about 91,000 tonnes.
Image source: Getty Images.
Where next for Southern Copper and copper
With copper inventories covering only 14 days of consumption and Freeport and Southern Copper (two major players in copper) struggling to grow volumes, the outlook is positive for prices. Freeport's production will recover as it brings production back online following a fatal incident in Indonesia, and there are exciting developments at Rio Tinto using muon technology to increase production, but they are for the future. Right now, the market looks positive for higher prices, and that's good for a low-cost producer like Southern Copper.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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