Rising copper prices drive Taiwan stocks, with First Copper leading the gains. How should investors respond next?

The Crossroads of Investment Risks and Opportunities

As LME copper futures prices rise to a record high of US$11,538 per ton, Taiwan’s copper concept stocks also surged accordingly. First Copper (2009) hit the daily limit-up with a strong rally, closing at NT$47.75, hitting a nearly 8-month high, with nearly 10,000 buy orders accumulating at the close. How will this international copper market trend transmit to the Taiwan market? What should investors consider next? These questions merit in-depth discussion.

The Three Main Drivers Behind the Copper Price Rise

The robust performance of international copper prices is not without cause. First, there are supply bottlenecks in global copper mines. News of production cuts from major copper-producing countries like Chile and Indonesia have led to concerns over tight mineral sources. Second, expectations of potential import tariffs in the US have triggered a rush to ship copper from Asian warehouses. Traders are accelerating shipments to the US to avoid increased costs after policy implementation, causing a sharp decline in spot inventories. Third, long-term demand supported by the global transition to green energy. Industries such as electric vehicles, solar power, and grid upgrades are major consumers of copper, laying a solid demand foundation for copper prices.

Ruiyuan Investment Analyst Wei Mingyu pointed out that this is not just market speculation but a true reflection of supply and demand fundamentals. The strength of international copper prices provides strong support for related stocks like First Copper.

The Chain Reaction in Taiwan’s Copper Concept Stocks

The copper price rally has ignited enthusiasm among Taiwan’s market funds. Besides First Copper leading the charge, Huayao (1608) surged over 7% intraday, and Daya (1609) also rose more than 3%. The entire copper-related sector is showing signs of full activation. From a technical perspective, First Copper has formed a low-base pattern of strength, with proper price-volume support. Wei Mingyu believes that if First Copper can effectively break through the previous stronghold around NT$48.75, it could open a new wave of upward space.

Next Steps in Operation Strategies and Risk Warnings

However, short-term risks are gradually emerging. The Relative Strength Index (RSI) of LME copper prices is approaching overbought territory, and technical corrections cannot be ignored. For investors interested in participating in the trend, the following points should be noted:

First, avoid blindly chasing prices near the daily limit-up, especially during periods of high market sentiment. Second, closely monitor whether individual stocks continue to gain volume support during upward moves, and whether international copper prices show signs of fluctuation at high levels. Third, pay attention to potential market turning points around December 20.

Medium to Long-Term Outlook: Bullish Pattern Remains Unchanged, Volatility Is Inevitable

Considering factors such as low global inventories, rigid demand from green energy, and geopolitical stockpiling, the medium to long-term bullish pattern of copper prices is unlikely to be shaken. However, due to rapid short-term gains, market volatility is unavoidable.

The future performance of First Copper has become an important risk indicator for the market. Whether it can continue to lead the sector higher depends on whether international copper prices can stabilize at high levels and whether Taiwanese related companies’ orders and profits can reflect the positive impact of raw material price increases. Investors should remain cautious despite optimistic expectations, strictly adhere to operational discipline, and only then can they truly succeed in the copper wave.