Southern Copper Surges 3.28% on Copper’s Record Highs and Earnings Optimism – Is This the Start of a New Bull Run?

Summary
• Southern Copper (SCCO) rockets 3.28% intraday, hitting a 52-week high of $148.925
• Copper prices climb to $11,771/ton on Fed rate cuts and global demand surge
• Earnings estimates for FY2025 revised up 0.2%, with next-year projections rising 0.9%

Southern Copper’s sharp intraday rally aligns with a historic surge in copper prices, driven by the Fed’s dovish pivot and robust demand from clean energy and infrastructure sectors. The stock’s 3% gain reflects optimism around earnings revisions and a tightening copper supply-demand balance, with SCCO outperforming the broader market amid sector-wide momentum.

Copper’s Record Highs and Earnings Optimism Fuel Southern Copper’s Rally
Southern Copper’s 3.28% intraday surge is directly tied to the global copper market’s record-breaking performance. The Fed’s 25-basis-point rate cut and upgraded U.S. growth forecast have weakened the dollar, boosting copper’s appeal. Simultaneously, China’s proactive fiscal stance and U.S. infrastructure spending are driving demand, with copper consumption projected to hit 33 million tons by 2035. SCCO’s earnings revisions—up 0.2% for FY2025 and 0.9% for FY2026—reflect analysts’ confidence in the company’s ability to capitalize on higher metal prices and production efficiency gains. The stock’s breakout above its 52-week high of $148.925 signals strong technical momentum, supported by a bullish RSI (80.35) and MACD crossover (3.04 vs. 1.83).

Copper Sector Soars as Southern Copper Hits 52-Week High
The broader copper sector is surging, with Freeport-McMoRan (FCX) rising 3.53% on similar tailwinds. Copper’s $11,771/ton level—a 35% annual gain—reflects a global supply deficit exacerbated by mine disruptions in Chile and Peru. SCCO’s 3% rally mirrors the sector’s strength, as demand from renewable energy and EVs accelerates. However, SCCO’s earnings revisions (up 0.2% for FY2025) outpace FCX’s, suggesting stronger near-term fundamentals. The Zacks Mining - Non Ferrous industry has gained 6.8% over the past month, with SCCO’s 5.3% return outperforming the S&P 500’s 0.9%.

Options and ETFs to Watch: Capitalizing on Copper’s Momentum
• RSI: 80.35 (overbought)
• MACD: 3.04 (bullish), Signal Line: 1.83
• 200-day MA: $105.26 (well below current price)
• Bollinger Bands: Price at $148.29 (near upper band of $146.53)

Southern Copper’s technicals suggest a continuation of its bullish trend. Key resistance lies at the 52-week high of $148.925, with a breakdown below the 200-day MA ($105.26) signaling a reversal. The RSI’s overbought level (80.35) indicates potential near-term profit-taking, but the MACD’s positive divergence supports a longer-term hold. For leveraged exposure, consider the SCCO20251219C140 and SCCO20251219C145 options, which balance liquidity and leverage.

• SCCO20251219C140 (Call):
- Strike: $140, Expiry: 12/19
- IV: 42.19% (moderate), Delta: 0.8144 (high), Theta: -0.3748 (high decay), Gamma: 0.0272 (moderate)
- Turnover: 30,943 (liquid)
- Payoff (5% upside): $8.29 (max(0, 155.70 - 140))
- Rationale: High delta ensures price sensitivity; moderate IV and high turnover make it ideal for short-term bullish bets.

• SCCO20251219C145 (Call):
- Strike: $145, Expiry: 12/19
- IV: 41.75% (high), Delta: 0.6437 (moderate), Theta: -0.3897 (high decay), Gamma: 0.0383 (strong)
- Turnover: 27,267 (liquid)
- Payoff (5% upside): $10.70 (max(0, 155.70 - 145))
- Rationale: High gamma and IV make it responsive to volatility; moderate delta balances risk and reward.

Aggressive bulls may consider SCCO20251219C145 into a breakout above $148.925, while conservative traders can use SCCO20251219C140 for a lower-risk entry.

Backtest Southern Copper Stock Performance
The backtest of SCCO's performance following a 3% intraday surge from 2022 to the present indicates positive short-to-medium-term gains, with the 3-Day win rate at 55.36%, the 10-Day win rate at 55.16%, and the 30-Day win rate at 59.92%. The maximum return observed was 5.76% over 59 days, suggesting that while there is volatility, SCCO can exhibit favorable performance in the immediate aftermath of such an increase.

Bullish Momentum Intact – Position for Copper’s Next Leg Higher
Southern Copper’s 3.28% rally is a microcosm of the broader copper market’s surge, driven by dovish monetary policy and structural demand from clean energy. With copper prices near record highs and SCCO’s earnings revisions trending upward, the stock is well-positioned for further gains. Watch for a breakout above $148.925 to confirm the trend, with a stop-loss below $138.23 (30D support). Sector leader Freeport-McMoRan (FCX) has surged 3.53%, reinforcing the sector’s strength. Investors should prioritize SCCO20251219C145 for leveraged exposure, while holding long-term positions with a 5% upside target of $155.70.