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Copper Miners Outlook: It's Worse Than You Think

The battered stocks may screen cheap, but we see further downside as Chinese demand from real estate and power activity ebb.

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Jeff Stafford: The outlook for copper is worse than most think. Battered copper-mining stocks may screen cheap, but we see further downside.

Despite many analysts dialing back their near-term copper-price forecasts, they remain bullish on the long term. We disagree and forecast a long-term price of only $2 per pound, mainly because we see mounting evidence that Chinese copper demand reached a cyclical peak in 2015. Ebbing Chinese demand from real estate and power activity are the main culprits.

Jeffrey Stafford does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.