Decoding Southern Copper's Short Interest: A Sentiment Gauge Amid a 68% Rally

Short interest is a key sentiment indicator, and Southern Copper Corp presents a striking case of elevated bearish positioning. As of late 2025, , . This level is a clear signal of significant pessimism, as a short interest percentage above 10% is considered high and suggests a notable contingent of investors are betting against the stock.

The pressure on these short sellers is quantified by the short interest ratio, which measures how many days it would take to cover all short positions at average trading volume. SCCO's . While this falls short of the 10+ threshold that signals extreme pessimism, a ratio above 4 is generally viewed as a warning sign of potential short squeeze risk if the stock rallies. It indicates that covering the current short position would require a full week of average trading volume.

The most telling context, however, is the comparison to . The average short interest for Southern Copper's mining and metals competitors is a fraction of its own. One source cites a peer group average of , while another puts it at 1.57%. This stark divergence highlights that SCCO's bearish sentiment is not a sector-wide phenomenon but a company-specific overhang. The stock is being shorted at a rate more than five times the industry norm.

This creates a central question for 2026: is this high-profile bearish bet sustainable given the stock's dramatic rally? The elevated short interest acts as a built-in source of future buying pressure. If the stock's positive momentum continues, covering these short positions could fuel further upside-a classic dynamic. Conversely, if the rally stalls, the sheer volume of shorts represents a large pool of potential sellers. For now, the numbers paint a picture of a stock where a powerful bullish narrative is actively being challenged by a concentrated, high-stakes bearish bet.

The Sentiment-Price Divergence: Rallying Against the Bears

Southern Copper's stock is on a powerful run, . This momentum is unfolding against a backdrop of persistent bearish sentiment, creating a classic divergence that tests the durability of the rally. The market is clearly rewarding the stock's performance, but the underlying sentiment remains cautious.

The key indicator of that caution is short interest. As of June 30th, 10.12% of Southern Copper's floating shares are sold short. This is a high level, signaling that a significant portion of the float is being bet against. The short interest ratio of 6.0 also points to a market where bears have a meaningful position. Yet, . This reduction suggests that some of the most aggressive short sellers are covering their positions, perhaps taking profits on a stock that has already delivered a massive move. It's a sign that the bearish narrative is fraying at the edges.

This active, volatile trading environment is reflected in the stock's metrics. , Southern Copper is not a passive holding. It is a stock where capital is actively moving in and out, driven by both momentum and sentiment shifts. This high turnover indicates a market that is constantly reassessing its position, which can amplify both gains and losses.

The bottom line is a fragile equilibrium. The powerful price action is a direct refutation of the bearish sentiment embedded in the 10% short interest. For the rally to continue, this divergence must hold. It requires that the fundamental drivers-likely tied to copper prices and the company's operational performance-remain strong enough to keep attracting buyers and discouraging new short entries. The recent decline in short interest is a positive sign, but the stock's high volatility and the sheer size of the short position mean the bears are still present and poised to re-enter if the price action shows any sign of weakness. The rally is impressive, but it is being built on a foundation of conflicting signals.

Risk & Catalysts: Where the Thesis Could Break

The bullish thesis for Southern Copper is now priced for perfection. , a move that has compressed the bearish sentiment reflected in its short interest. With , the position is large enough to create a potential short squeeze catalyst if the price moves sharply higher. The mechanics are straightforward: a sustained price appreciation forces short sellers to cover their positions by buying shares, which in turn can drive the price up further. This dynamic is a key risk to the bearish case, as it can rapidly unwind pessimism.

However, the current setup introduces a new friction that could dampen a potential squeeze. The cost of maintaining a short position is rising. The short borrow fee rate for SCCO is tracked at a premium, meaning the annual interest paid by a short seller to borrow shares is elevated. This increasing cost acts as a deterrent, making it more expensive to hold a short position. It could lead to a scenario where short sellers are forced to cover not just due to price pressure, but also because the financing cost of their bet is becoming unsustainable.

The primary risk, therefore, is that the rally is overextended. . A pullback from these levels would trigger a wave of short covering, but the magnitude of that move is uncertain. In a market with high concentration, a sharp move in a single stock can exacerbate volatility. The risk is not just a reversal of the rally, but a violent one, as the squeeze dynamics work in reverse. A rapid price decline could force short sellers to cover, but the high borrow fees and the sheer size of the short position could amplify the downside pressure, creating a volatile and unpredictable move.

The bottom line is a market caught between two powerful forces. On one side, a strong rally has built a foundation for a short squeeze. On the other, rising financing costs and elevated valuations create a fragile equilibrium. The thesis breaks if the price fails to hold its recent gains, triggering a wave of covering that could overshoot and create a sharp, volatile correction. Investors must watch for a breakdown in the uptrend, as that is the catalyst that could turn the short squeeze narrative on its head.