Southern Copper Plunges 2.8% Amid Tariff Shockwave—Can the Bull Run Survive the Copper Crash?

Summary
• Southern Copper (SCCO) slumps 2.7984% to $91.525, hitting an intraday low of $91.37 amid Trump’s 50% tariffs on copper products.
• Q2 2025 earnings show mixed results: $976.7M net income (+2.4% YoY) but $3.05B revenue (-2.2% YoY).
• Copper futures hit a historic one-day low, with COMEX stocks surging to 258,000 tons as traders rush to LME warehouses.
• Sector leader Freeport-McMoRan (FCX) down -1.1058%, signaling broad-based pain in the copper complex.

Southern Copper’s sharp intraday drop reflects a perfect storm: Trump’s tariffs have shattered copper’s 52-week premium structure, while the company’s mixed earnings failed to offset sector-wide panic. With SCCO trading near its 52-week low and Bollinger Bands signaling oversold conditions, traders are scrambling to assess whether this is a buying opportunity or a deeper bearish shift.

Trump’s Tariff Tsunami Drowns Copper Demand
Southern Copper’s 2.8% intraday plunge is directly tied to President Trump’s 50% import tariffs on semi-processed copper products, which erased the US’s $1.62/ton premium in five sessions. This policy shockwave has triggered a $4.40 per pound sell-off in December copper futures, with speculative funds liquidating 60,000+ long contracts. Despite SCCO’s Q2 earnings showing resilient net income growth and a 0.8045% turnover rate near its 200-day average, the stock’s technicals—34.12 RSI and a -0.8693 MACD—confirm bearish momentum. The earnings report’s optimism about operational efficiency now clashes with a reality where China’s 7.5-12% 2025 production surge threatens to drown global demand.

Copper Sector Reels as Tariffs Crush Demand, FCX Trails SCCO
The copper sector is in freefall, with SCCO’s -2.7984% drop outpacing even sector leader Freeport-McMoRan’s -1.1058%. Trump’s tariffs have triggered a $200M+ unwind in copper’s speculative longs, pushing COMEX stocks to 258,000 tons—tripling year-to-date. While FCX’s diversified operations offer some buffer, SCCO’s 74.1063 52-week low and 19.17 P/E suggest heightened vulnerability. The sector’s $3.05B revenue decline (SCCO’s Q2 result) mirrors broader industry pain, as Chinese PMI readings and Trump’s 62 new reciprocal tariffs amplify bearish sentiment.

Bearish Options Playbook: Leveraging SCCO’s 34.12 RSI Oversold Conditions
• 200-day MA: 96.8358 (above current price)
• 30-day MA: 99.0777 (resistance zone)
• RSI: 34.12 (oversold)
• MACD: -0.8693 (bearish divergence)
• Bollinger Bands: Lower bound at $91.78 (critical support)

With SCCO near its 52-week low and Bollinger Bands signaling oversold conditions, bearish options offer asymmetric potential. Two top picks:

• SCCO20250815P90 (Put):
- Strike: $90
- Expiry: 2025-08-15
- IV: 43.57% (moderate)
- Delta: -0.4083 (sensitive to price drop)
- Theta: -0.0579 (moderate decay)
- Gamma: 0.0480 (price responsive)
- Turnover: $3,705
Why it stands out: 36.57% leverage ratio amplifies gains if SCCO breaks below $91.78. A 5% downside (to $86.95) would yield a $3.05 intrinsic value, with IV expansion boosting time value.

• SCCO20250815P92.5 (Put):
- Strike: $92.5
- Expiry: 2025-08-15
- IV: 51.55% (high)
- Delta: -0.5203 (deep in the money)
- Theta: -0.0641 (aggressive decay)
- Gamma: 0.0416 (moderate responsiveness)
- Turnover: $5,595
Why it stands out: High IV and -0.52 delta make it ideal for a $90+ move. A 5% drop in SCCO would generate $6.55 intrinsic value, with leverage ratio of 21.02% boosting returns.

If SCCO breaks below $91.78, SCCO20250815P90 offers short-side potential. Aggressive bulls may consider SCCO20250815C92.5 into a bounce above $93.54 (intraday high).

Backtest Southern Copper Stock Performance
The backtest of SCCO's performance after a -3% intraday plunge shows favorable short-to-medium-term gains. The 3-Day win rate is 56.16%, the 10-Day win rate is 55.99%, and the 30-Day win rate is 56.32%. This indicates a higher probability of positive returns in the immediate aftermath of the plunge, with the maximum return during the backtest period being 6.01% over 30 days.

Southern Copper at Crossroads: Bet the Breakdown or Bounce?
Southern Copper’s 2.8% intraday drop has created a high-risk, high-reward scenario. The stock is testing its 52-week low of $74.11 and Bollinger Band support at $91.78—a critical level for trend continuation. With the sector leader FCX down -1.1058%, SCCO’s bearish technicals and Trump’s tariffs suggest further downside. However, the 34.12 RSI and 0.8045% turnover rate hint at potential rebound. Traders should watch for a breakdown below $91.78 or a reversal above $93.54 (intraday high) to determine the next move. Watch for $91.78 support and sector sentiment for SCCO’s next move.