Southern Copper Surges 3.9% Amid Copper Sector Volatility: What's Fueling the Rally?

Summary
• Southern Copper (SCCO) rockets 3.9% intraday to $97.42, outpacing broader copper sector gains
• Sector news highlights Marimaca’s 13-year high and Antofagasta’s 2021-level profits
• Leveraged ETFs like ICOP and COPP surge 3.1%–3.1%, mirroring SCCO’s momentum
• Copper futures inch up 0.48% to $4.46/lb, but face 23% monthly decline

SCCO’s sharp rebound defies a bearish technical backdrop, with the stock trading near its 52-week high of $117.46. The rally coincides with a surge in copper sector optimism, driven by exploration breakthroughs and production efficiency gains. With the stock now within striking distance of its 200-day moving average ($95.49), traders are weighing whether this is a short-term bounce or a potential reversal in a long-term downtrend.

Copper Sector Optimism Driven by Exploration and Production Gains
SCCO’s 3.9% intraday surge aligns with a wave of bullish developments in the copper sector. Marimaca’s recent drilling at Pampa Medina expanded its ore body, signaling renewed exploration potential. Meanwhile, Antofagasta’s 11% production increase and lower cash costs have boosted sector confidence. These developments, coupled with Freeport-McMoRan’s 3.98% rally, suggest a shift in sentiment toward copper’s supply-side fundamentals. The stock’s breakout above its 30-day moving average ($96.66) and into the upper Bollinger Band ($100.72) further reinforces short-term bullish momentum.

Copper Sector Rally Gains Momentum as FCX Leads Charge
Southern Copper’s 3.9% gain mirrors the broader copper sector’s strength, with Freeport-McMoRan (FCX) surging 3.98% to lead the charge. The sector’s optimism is fueled by production efficiency gains and geopolitical tailwinds, such as the U.S. 50% tariff on copper-containing goods. While SCCO’s rally is more directly tied to exploration optimism, the sector-wide move underscores a broader re-rating of copper’s value in green energy infrastructure and industrial demand.

Leveraged ETFs and Options Signal Bullish Momentum in Copper Sector
• MACD: -0.7226 (bearish divergence), Signal Line: -0.4653, Histogram: -0.2573 (negative momentum)
• RSI: 54.78 (neutral, approaching overbought)
• Bollinger Bands: $90.63–$100.72 (SCCO near upper band)
• 200-day MA: $95.49 (below current price)
• Support/Resistance: 96.36–97.13 (200D), 97.40–97.62 (30D)

SCCO’s technicals suggest a short-term bullish setup, with the stock poised to test its 52-week high. The iShares Copper and Metals Mining ETF (ICOP) and Sprott Copper Miners ETF (COPP) offer leveraged exposure, both up over 3.1% today. For options, SCCO20250919C97.5 and SCCO20250919C105 stand out:

• SCCO20250919C97.5
- Type: Call, Strike: $97.5, Exp: 2025-09-19
- IV: 28.95% (moderate), Leverage: 30.46%, Delta: 0.5187 (moderate), Theta: -0.0728 (high decay), Gamma: 0.04997 (high sensitivity), Turnover: 6,827
- Payoff at 5% upside (ST = $102.3): $4.80/share. This contract balances leverage and liquidity, ideal for a moderate bullish bet.

• SCCO20250919C105
- Type: Call, Strike: $105, Exp: 2025-09-19
- IV: 28.58% (moderate), Leverage: 121.84%, Delta: 0.1916 (low), Theta: -0.0442 (moderate decay), Gamma: 0.0347 (moderate sensitivity), Turnover: 31,873
- Payoff at 5% upside (ST = $102.3): $0.00 (out-of-the-money). While high-leverage, this contract requires a stronger move to profit, suiting aggressive bulls.

Aggressive bulls may consider SCCO20250919C97.5 into a bounce above $97.50.

Backtest Southern Copper Stock Performance
The backtest of SCCO's performance after a 4% intraday surge shows favorable short-to-medium-term gains, with win rates and returns increasing across 3, 10, and 30 days. This indicates the strategy's effectiveness in capturing positive momentum, making it a potentially profitable approach for traders looking to capitalize on intraday volatility.

Bullish Setup Confirmed: Position for Copper's Next Move
SCCO’s 3.9% rally reflects a confluence of sector optimism and technical momentum, with the stock nearing key resistance levels. While the MACD remains bearish, the RSI’s approach to overbought territory and the 200-day MA crossover suggest a potential short-term reversal. Traders should monitor the $97.50 level for a breakout confirmation and watch Freeport-McMoRan (FCX) for sector leadership cues. With copper fundamentals improving and leveraged ETFs surging, now is the time to position for a potential continuation of the rally. Watch for a $97.50 breakout or a breakdown below $93.74 to dictate next steps.