Southern Copper Surges 3.85% on Bullish Intraday Rally Amid Copper Market Volatility

Summary
• Southern Copper (SCCO) trades at $100.99, up 3.85% from its $97.25 close
• Intraday high of $101.65 and low of $98.54 highlight sharp consolidation
• Copper futures hit $4.56/lb, rebounding from a 20% selloff triggered by U.S. tariff adjustments

The copper sector is in flux as U.S. policy shifts and Chinese regulatory moves reshape supply dynamics. Southern Copper’s 3.85% intraday surge reflects broader market optimism amid tightening copper fundamentals and geopolitical recalibration. With SCCO trading near its 52-week high of $117.46, the stock’s momentum aligns with a sector-wide re-rating driven by tariff uncertainty and margin support for ore refiners.

Tariff Revisions and Margin Support Fuel SCCO’s Rally
Southern Copper’s 3.85% intraday gain stems from a confluence of U.S. tariff adjustments and Chinese policy shifts. The U.S. government’s decision to exclude refined copper from new tariffs—limiting levies to semi-finished products—sparked a 20% selloff in copper futures earlier this week. However, the market has since rebounded as Chinese regulators removed subsidies for scrap copper recycling, directly supporting margins for ore refiners like SCCO. This policy shift has alleviated pressure on SCCO’s refining margins, which had been strained by negative treatment charges. Meanwhile, U.S. copper imports surged in anticipation of tariffs, creating a temporary supply imbalance that SCCO is well-positioned to exploit.

Copper Sector Gains Momentum as Freeport-McMoRan Leads Rally
The copper sector is rallying in tandem with SCCO’s surge, led by Freeport-McMoRan (FCX), which is up 2.64% intraday. FCX’s performance underscores the sector’s alignment with global supply tightening and margin expansion. SCCO’s 3.85% gain outpaces FCX’s rally, reflecting its exposure to Chinese policy-driven margin support. While FCX benefits from U.S. production and geopolitical tailwinds, SCCO’s position in the refining value chain—bolstered by the removal of scrap copper subsidies—positions it to capture higher-margin opportunities as global demand for refined copper outpaces supply.

Options Playbook: Leverage SCCO’s Bullish Momentum with Gamma-Driven Contracts
• 200-day MA: $95.03 (below current price)
• RSI: 46.89 (neutral)
• MACD: -0.10 (bullish histogram divergence)
• Bollinger Bands: Price at $100.99 (above upper band at $100.05)

SCCO’s technicals suggest a continuation of its bullish momentum. The stock is trading above its 200-day MA and forming a bullish engulfing pattern, while the RSI remains in neutral territory, avoiding overbought conditions. The MACD histogram’s positive divergence indicates strengthening upward momentum. Key support levels at $96.34 (30D MA) and $96.54 (middle Bollinger Band) could trigger a retest of the $98.54 intraday low if the rally stalls. For leveraged exposure, options with high gamma and moderate delta offer optimal risk-reward profiles.

Top Option 1: SCCO20250919C95
• Type: Call
• Strike: $95
• Expiration: 2025-09-19
• IV: 33.05% (moderate)
• LVR: 14.85% (high)
• Delta: 0.8159 (high)
• Theta: -0.1059 (high time decay)
• Gamma: 0.0368 (moderate)
• Turnover: 7,530 (high liquidity)

This call option offers aggressive leverage (14.85%) with a high delta (0.8159) to capitalize on SCCO’s upward trajectory. The high gamma (0.0368) ensures sensitivity to price swings, while the moderate IV (33.05%) balances cost and volatility. A 5% upside to $106.04 would yield a 72.59% payoff, making it ideal for short-term bullish bets.

Top Option 2: SCCO20250919C100
• Type: Call
• Strike: $100
• Expiration: 2025-09-19
• IV: 30.47% (moderate)
• LVR: 31.56% (high)
• Delta: 0.5764 (moderate)
• Theta: -0.1156 (high time decay)
• Gamma: 0.0589 (high)
• Turnover: 9,539 (high liquidity)

This call provides a balanced approach with a 31.56% leverage ratio and high gamma (0.0589) to amplify gains as SCCO approaches its 52-week high. The moderate delta (0.5764) ensures responsiveness to price action without excessive premium erosion. A 5% move to $106.04 would generate an 88.24% payoff, aligning with the stock’s breakout potential.

Action: Aggressive bulls should target SCCO20250919C95 for a 72.59% payoff on a 5% upside. Conservative traders may prefer SCCO20250919C100 for a 88.24% return with lower delta risk.

Backtest Southern Copper Stock Performance

Bullish Momentum Intact – Position for Next Move
Southern Copper’s 3.85% intraday surge is a microcosm of the copper sector’s resilience amid regulatory and geopolitical shifts. With SCCO trading above its 200-day MA and forming a bullish engulfing pattern, the stock is primed for a continuation of its upward trajectory. Freeport-McMoRan’s 2.64% rally reinforces the sector’s strength, but SCCO’s exposure to Chinese margin support positions it as a top-tier play. Investors should monitor the $101.65 intraday high for a breakout confirmation and watch for a retest of the $96.34 support level. For options traders, the SCCO20250919C95 and SCCO20250919C100 contracts offer high-gamma, high-leverage opportunities to capitalize on the stock’s momentum. Act now: Buy SCCO20250919C100 ahead of the 52-week high challenge.