Poongsan's stock price rose 8.78% in a single day on the 19th. While the company's defense industry has garnered attention due to the European Union's military rearmament and increased defense spending, the driving force behind the stock price rise that day is considered to be the 'copper business.' Analysts suggest that the surge in copper prices has also contributed to the rise in Poongsan's stock. Poongsan manufactures materials ranging from industrial applications to coins using copper and copper alloys.
At the London Metal Exchange (LME), the three-month copper price surpassed $9,900 per ton. Earlier this year, the price was around $8,800 per ton. The decline in copper inventories at the London Metal Exchange to their lowest level in nine months has driven up prices.
Following gold and silver, which have attracted significant investment this year, copper is also gaining attention as a promising asset.
The easiest way to invest in copper is through trading exchange-traded funds (ETFs) or exchange-traded notes (ETNs) that track copper futures. There are ETNs listed in the domestic stock market that track copper prices, including leveraged ETNs that double the returns. Indirect investment in related stocks like Poongsan is also an option.
The background to the rising commodity prices, even leading investors to focus on copper rather than gold or silver, is the tariff war led by U.S. President Donald Trump. President Trump signed an executive order last month directing an investigation into U.S. copper imports, raising the possibility of tariffs and leading to actions aimed at sending copper to the U.S. in advance.
Kim Jin-beom, a researcher at Sangsangin Investment & Securities, noted, "The copper stocks at the London Metal Exchange have decreased from 271,000 tons at the beginning of the year to around 227,000 tons," adding that it seems to be an effort to pursue profits before any tariff imposition.
The issue is that it cannot be guaranteed whether copper prices will continue to remain strong. Copper prices are greatly influenced not only by inventory conditions but also by the global industrial economic trends. Copper, often referred to as 'Dr. Copper' due to its tendency to respond first to changes in economic conditions, can rise or fall ahead of the overall economy.
Gold and silver are recognized as safe assets, which typically see price increases during times of economic uncertainty, whereas copper is not treated as a safe asset. This means that if downward pressure on the economy increases, copper prices could decline.
Copper prices surged above $10,000 per ton last May amid expectations of large-scale infrastructure investments driven by artificial intelligence (AI), but soon weakened due to rising concerns about the global economy, particularly in China.
Jerome Powell, chair of the Federal Reserve, said in a press conference after the March Federal Open Market Committee (FOMC) meeting overnight, "The probability of a U.S. recession according to forecasting institutions has increased, but that possibility still remains low."
However, the forecast for U.S. economic growth this year has been downgraded from 2.1% to 1.7%. With President Trump announcing reciprocal tariff imposition starting from the 2nd of next month, concerns about the economy may intensify. The fact that sectors related to copper, which typically track copper prices, have already peaked and are declining further indicates that there are not many investors optimistic about the economic outlook.
For reference, copper prices fell sharply below $9,000 per ton last November. It is worth remembering that this was on the day of President Trump's election.