How to invest in copper

As global industries move toward electrification and clean energy, some investors could be starting to view copper in a new light. Often classified as an industrial metal, using copper as an investment could serve as a potential portfolio diversifier tied to long-term structural change.

Copper has developed a reputation as a versatile industrial metal. Because it conducts electricity well and is highly durable, copper is used in everything from power grids and building wiring to electrical and electronic products.¹ Copper is also sometimes referred to as a barometer of the global economy as a whole, earning it the nickname “Dr. Copper.”² Strong demand from companies can signal a healthy economy, while weaker demand may indicate a slowdown.

Global demand for copper has been predicted to climb 50% by 2040.³ This growth is closely linked to expanding electrification and the worldwide shift toward decarbonization. For investors following commodities markets, these shifts might place copper at the center of future supply-chain and energy transitions.

Other reasons investors might opt for copper include:

• As a physical metal, owning copper directly is thought to work as a hedge against inflation, which some investors use to preserve the value of their investment when prices are rising.

• It may be more affordable to invest in than precious metals like gold or silver.

• It is part of a broader category of alternative investments that could help investors to diversify their portfolio.

Investors have a few different routes for trading or investing in copper. Each option comes with different levels of volatility, liquidity, and risk, so investors might approach them with a clear understanding of their own personal risk tolerance.

One way some investors gain copper exposure without picking individual stocks is through exchange-traded funds (ETFs). Someone who invests in copper ETFs does not own the metal itself. Instead, they invest in a fund that aims to match how copper prices or copper-related stocks perform over time. There are two main types of copper ETFs:

1. Futures-based ETFs, which are designed to follow the price of copper itself by holding copper futures contracts (agreements to buy or sell copper at a set price in the future). So their value goes up or down with short-term changes in copper prices.

2. Equity-based ETFs, which invest in shares of copper mining companies. Their performance depends on how those companies do, which, in turn, is influenced by copper demand and prices.

Investors also have the option of exchange-traded commodities (ETCs), which track copper prices directly rather than holding a basket of stocks or futures.

ETFs are traded like stocks on an exchange but they typically have lower fees than actively managed funds. Because they are considered relatively straightforward to trade during regular market hours, copper ETFs may appeal to investors seeking a more passive investment strategy that allows for liquidity.

For those who might prefer to make their own choice about where to invest in copper, another option is to buy stocks from individual mining companies. A few established producers currently dominate the copper mining landscape, but the industry also includes developing firms and smaller exploratory ventures. Major production is found in countries such as Chile, Peru, the Democratic Republic of Congo, China, and the U.S.⁴

When deciding how to invest in copper stocks, factors might include a company’s performance and details like how it’s run and its financial health. This could include its cash flow, debt load, and how well it aligns with broader copper market cycles. For those seeking income, established names that qualify as dividend stocks (or dividend reinvestment plans) might be viewed as offering more stability, though standard market risks still apply.

For those exploring more advanced investment strategies, copper futures contracts offer a way to trade on copper price movements with a high degree of leverage. These products are typically available on platforms that also support other commodities (like oil or energy), which means prices can change quickly. Because of their complexity and volatility, investors may need to be comfortable with trading copper in real time and maintaining a close watch on contract terms and technical indicators.

Of course, investors can also hold physical copper directly, such as through bars, bullion, or a specialized fund. Owning copper in its physical form comes with added responsibilities and practical considerations. It will need to be insured and stored in a safe and appropriate place. Plus, it has lower liquidity and is harder to convert into cash compared to other assets.

Copper may be considered as a long-term investment option, but it carries risks due to the cyclical nature of global markets. Prices can be sensitive to macroeconomic shifts, policy changes, and geopolitical events. Key risks to consider include:

• Copper prices can fluctuate sharply in a short space of time. In July 2025, for instance, prices rose 17% to a record $5.89 per pound before falling again, influenced partly by supply constraints and geopolitical tension.

• Production of copper has become more challenging over the years, with average ore grades declining by around 40% since 1991.⁵ The result of this is potentially higher costs and tighter supply, which may ultimately affect the performance of copper investments.

• Political stability and environmental regulation can affect supply and demand.

• For copper-related stocks or ETFs, performance may be partly dependent on certain other factors, like a company’s debt levels or cash flow.

• The expected increase in global demand may mean major investments are needed in infrastructure, and experts have spoken of the difficulties of expanding copper supply quickly.

This really depends on your investment goals and experience level. Because copper’s price often moves with global industrial activity, it might be an option for investors who are interested in commodities and looking to add a different dimension to their portfolio. 

At the same time, its price can shift with changes to supply and the overall geopolitical situation. While this can create opportunities, it also brings volatility that could potentially mean loss of principal. ETFs can offer a way into copper investing for beginners by mitigating some of the risk associated with individual stock selection, but investing is never entirely risk-free. As always, understanding your personal risk tolerance may help you decide if copper belongs in your broader investment strategy.

Conservative investors who prioritize stability may prefer more predictable options such as certificates of deposit (CDs). With a CD account, you can lock in an interest rate for a set period, offering a fixed return on your money.

Each way of investing in copper comes with a different level of complexity and risk. As markets continue to evolve with industrial growth and the demand for cleaner energy, copper could remain a relevant part of the commodities space for those looking to balance out their portfolios. That said, trading copper also comes with its challenges, like price swings, geopolitical shifts, and supply-related delays.

If you’re looking for more predictable returns within your cash strategy, you might want to explore options like certificates of deposit. Simply choose one of the accounts available through the Raisin marketplace, set up your free Raisin profile, and deposit your money.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

¹https://www.usgs.gov/centers/national-minerals-information-center/copper-statistics-and-information

²https://www.reuters.com/markets/us/global-markets-view-usa-2025-02-10/

³https://www.iea.org/reports/global-critical-minerals-outlook-2024/outlook-for-key-minerals

⁴https://natural-resources.canada.ca/minerals-mining/mining-data-statistics-analysis/minerals-metals-facts/copper-facts

⁵https://www.bhp.com/news/bhp-insights/2024/09/how-copper-will-shape-our-future