The ramped-up production of electric vehicles and renewable energy grids is expected to increase the demand for copper. And declining copper inventories amid growing demand should pump up copper prices. Thus, we think it could be wise to invest in fundamentally sound copper stocks Anglo American (LON:AAL) (NGLOY) and Southern Copper (NYSE:SCCO) to take advantage of their current share price dips. Let’s discuss.Copper prices slumped from a $10,747.50 record high price in May on investors’ concerns surrounding the global economic recovery with the continued spread of the COVID-19 Delta. Also, weakened output from China has contributed to weak momentum in copper prices.
However, copper prices appear to be rebounding on declining exchange inventories and the threat of a supply squeeze. Benchmark copper on the London Metal Exchange (LME) hit $9,268 per tonne, up 2.5%, on October 7. And analysts expect rising demand to fuel a price rally soon. Furthermore, in May Bank of America (NYSE:BAC) anticipated that copper prices could hit $20,000 per metric ton by 2025.
Copper is the third most used metal globally, and the ramped-up production of electric vehicles (EVs) should further heighten the demand for copper in the coming months. Thus, we think it could be wise to scoop up fundamentally sound copper stocks, Anglo American plc (NGLOY), and Southern Copper Corporation (SCCO) to take advantage of their current price dip.