Gimme Credit Reports on Copper Sector Amid U.S. Penny Retirement

As the United States officially retires the penny, the experts at Gimme Credit have provided intriguing insights into the copper sector, which is poised for significant developments in the coming months. With a team of seasoned corporate bond analysts, Gimme Credit sheds light on the factors influencing copper, including rising demand, tightening supply, and varying performance among leading global producers.

The Shift in Demand and Supply

The retirement of the penny may seem like a trivial event in the grand scheme of commodities; however, it signifies a shift toward a future where copper could play an increasingly vital role. Analysts are predicting a period of rising demand for copper driven by electrification and renewable energy initiatives. This newfound reliance on copper comes from its essential uses in various applications, including electric vehicles and renewable energy technologies.

On the supply side, Gimme Credit notes that production is tightening, which could further boost copper prices. The balance of supply and demand is increasingly critical, as new mining projects often face delays and operational challenges. Analysts emphasize that while some challenges exist, the long-term outlook appears promising for investors considering copper bonds.

Portfolio Insights from Key Producers

First Quantum Minerals

Gimme Credit highlights First Quantum as an emerging player in the copper sector. The company is ramping up production at its Kansanshi S3 project, which is expected to lead to credit improvements. They are also targeting a restart at Cobre Panamá in 2026-2027, with a strong liquidity position that backs a Buy rating for their 8% 2033 notes.

Southern Copper

Southern Copper has reported robust results for the first half of 2025, showcasing progress on significant projects in Peru and Mexico. Despite facing disruptions related to tariffs and heightened investment expenditures, Gimme Credit forecasts that the company's strong balance sheet will enable it to navigate challenges effectively.

Freeport-McMoRan

Freeport-McMoRan faces hurdles due to the Grasberg mud-rush, which will likely limit Indonesian production until 2027. Though they possess exceptional liquidity, the near-term bond performance is expected to be less favorable, resulting in an Underperform rating on their 2034 notes.