Could this “tectonic” shift in the copper market spike the prices of ASX copper stocks?

Remember when copper was supposed to be the next big thing in commodities? I do, it was only, like, a few months ago. How soon we forget and move on to the next shiny new plaything!?

To be fair, it wasn’t copper’s fault this time. I propose that it was looking very solid around March this year when I wrote this article on the metal and the ASX copper sector, but it was soon torpedoed by President Trump’s April 2 “Liberation Day” “reciprocal” tariffs.

Notice how us finance journos put those phrases in quotes? As in, “was anything actually liberated?” and “reciprocatin’ what, because I’m pretty sure those penguins on Heard and McDonald Islands had no trade beef with the USA prior to April 2.

High grade copper futures on COMEX price chart

For those of you who have all but lost hope in the copper story (and that your copper stocks will recover to their pre-“Liberation Day” “reciprocal” tariffs glory), this update will provide a new glimmer of hope. According to a new research report from major broking firm Macquarie, recent events have likely tightened supply in the copper market, and have thus set up an environment for both higher metal and stock prices down the track.

Tectonic shift shifts copper supply

Macquarie considers how the May 20 suspension of underground mining operations at the massive Kamoa-Kakula copper mine in the Democratic Republic of the Congo (DRC) will impact the copper market, and therefore copper prices and listed copper stocks. The mine, which is 40-40-20% owned by Vancouver-based Ivanhoe Mines (TSE: IVN), China’s Zijin Mining Group, and the DRC government, experienced multiple roof falls after a series of seismic events. Two of the mine’s three processing plants are now also operating at reduced capacity.

Ivanhoe, the mine’s operator, has chosen to withdraw 2025 calendar year production guidance of 520-580kt while it assesses the damage of the seismic events, and while it attempts repairs to underground infrastructure. According to all reports from the company so far, it’s unclear when production at the mine will restart.

Kamoa-Kakula was one of the world’s top five producers, and its shutdown has had a “significant impact” on global copper supply, suggests Macquarie. The broker’s modelling indicates that about 2.3% of annual global mine production is likely lost at least temporarily. Further, Kamoa-Kakula was of particular importance to the Chinese copper supply chain, responsible for around 8% of the country’s copper concentrate imports.

Macquarie also notes that Kamoa-Kakula’s shutdown comes as the 330ktpa Cobre Panama mine remains closed due to environmental concerns; it represented approximately 1.5% of global copper supply. “In light of the Kamoa-Kakula outage, copper concentrate inventories should remain tight, and this could help to support prices, in our view,” the broker concludes.

Macquarie’s ASX copper stocks to watch

Macquarie notes that despite the post-Liberation Day dip in the copper price, corporate activity in the sector is picking up with ASX-listed MAC Copper (ASX: MAC) receiving a takeover offer from South Africa-based Harmony Gold Mining Company (JSE: HAR). The $1.6 billion bid was made at a 20.7% premium to MAC’s closing price prior to the offer.

MAC Copper (ASX-MAC) share price chart

With MAC likely to fall to overseas bidders, and in light of recent copper and stock price moves, the spotlight is now on two other ASX copper miners in particular, suggests Macquarie. The broker notes that compared to copper’s 10% rise so far this year, Sandfire Resources (ASX: SFR) is up 22%, yet Capstone Copper (ASX: CSC) is down 17%. This means that SFR is the best-performing copper stock compared to a basket of major global copper miners, and CSC is the worst.

SFR “fairly valued”

Macquarie puts SFR’s relative outperformance down to its “low cost asset base, low balance sheet leverage, and consistent delivery to guidance”. The broker has updated its production profile for the company’s main operation, the MATSA project in Spain. It now expects SFR to produce 95kt of copper in FY26-28, the midpoint of the company’s guidance range, and costs are expected to fall to US$1.62/lb.

Sandfire Resources (ASX-SFR) share price chart

Macquarie presently only has a “Neutral” rating on SFR, after downgrading it from “Outperform” on 29 April due to a view that recent share price gains had rendered the stock “fully valued”. Macquarie did see fit to increase SFR’s price target in this latest update, though, to $11.50 from $10.90. To put this new target into perspective, SFR last closed at $11.56.

CSC “positive catalyst”

CSC’s underperformance relative to its global peers creates an opportunity, suggests Macquarie, noting the copper miner is its “preferred exposure” among a basket of global pure-play copper stocks. The broker cites the approval of the Environmental Impact Declaration (DIA) for the company’s 70% owned Mantoverde open pit copper-gold mine in Chile as a key positive catalyst. The approval, expected over the next few months, will allow for a permitted increase in milling capacity at the project from 32ktpd to 45ktpd.

Capstone Copper (ASX-CSC) share price chart

An additional catalyst for CSC, suggests Macquarie, could be the updated timing of the company’s sell-down of its minority stake in the Santo Domingo project (also in Chile). The market is expecting this to conclude in mid-2026, but Macquarie predicts it could occur as early as the end of this year. The broker also believes that stronger June quarter production could “drive a re-rate” of CSC among investors.

Macquarie rates CSC “Outperform” and maintains its $11.60 price target for the stock. The stock last closed at $8.69, so this suggests Macquarie sees around 33% upside.