Copper is the hottest commodity trade in the world right now. Here's how to get exposure

Please note, this interview was recorded Wednesday 6 May 2026

If you own BHP (ASX: BHP), RIO (ASX: RIO) or even a broad ASX ETF, you probably think you have meaningful copper exposure and you wouldn’t be alone in thinking that, but you might be wrong.

Sitting down with William Taylor, Chief Operating Officer and Portfolio Manager at ETF Shares, I realised that assumption deserves a serious second look.

Electrification, renewable energy, AI infrastructure and grid upgrades are all driving enormous demand for copper. What’s harder to see is how diluted your exposure can become through large diversified miners. BHP and Rio produce copper, but they also derive enormous earnings from iron ore and other commodities. When copper prices move, those gains can be quietly absorbed by what’s happening elsewhere in the business. Owning the miners isn’t the same as owning the metal.

“It’s not just an investment in Rio or BHP. You’re getting a broad basket that is global. So you’re investing more in the theme and the trend of copper.”

In thematic investing, the underlying thesis can be right while the exposure itself is wrong. As copper increasingly becomes tied to AI infrastructure, electrification and the energy transition, understanding exactly what you own may matter more than ever.

In this interview, Taylor explains why copper's demand profile is changing, why the supply crunch is more structural than most investors realise, and why getting your exposure right has never mattered more. 

Interview Summary

The electrification story has changed

Taylor argues copper is no longer just a China construction trade. Instead, it has become central to the infrastructure buildout underpinning the modern economy.

"The biggest theme right now in copper is the electrification of everything," Taylor said. "What that means is copper's basically the physical link between this new digital economy and the power grid."

According to Taylor, there are now three major demand drivers: power grid upgrades, renewable energy infrastructure and the rapid expansion of AI-driven data centres.

"The grid was kind of designed in the 20th century. It was more from a fuel intensive way to make energy. That's now pivoting to more of the electricals and the renewables. So as a result, it requires a lot more rewiring and a lot more work from a copper perspective."

Renewable energy adds another layer of demand on top of that.

"The way in which we set that up is completely different. And again, it's a lot more copper intensive because you require multiple solar or wind to generate the same amount from a coal plant, for example. So you actually require more wiring to put it back into the grid."

The AI component, however, may be the least appreciated of the three.

"There's a huge amount of investment in AI data centres and for a hundred megawatt data centre, you're looking at around two and a half thousand tonnes of copper just for each one," Taylor said.

"That's the equivalent of running a heavy duty wire from here to Perth. So there's an obscene amount of demand for what's required for us to set up this kind of AI infrastructure and for us as an economy to kind of prosper in the next decade."

Why supply may struggle to respond

The supply side of the copper story remains deeply underestimated, and Taylor is unambiguous: the shortfall is real, structural and getting harder to paper over.

"The purity of the ore has actually decreased over the last 30 years from around 2% to 0.5%," he said. "What that means is these mining companies actually have to work even harder just to stay afloat and produce the same amount."

Engineering talent is compounding the problem, with fewer graduates choosing mining over software and technology careers.

"There's actually less engineers wanting to move into this sector. More people prefer software, computing and different types. So the actual availability of labour is diminished."

Of all the supply constraints though, timing may be the most immovable.

"These mines take over a decade to actually go from finding the copper, going through the approvals, building construction, and actually getting it out of the ground. So it's not a case of you can turn it on overnight because there's a huge surge in demand."

For those hoping recycling might close the gap, Taylor is sceptical that the economics stack up anywhere near quickly enough.

"To do that process is very time consuming, it's expensive. We're not set up to do that yet. So as much as, yes, it could be done – whether we can build that at scale to really drive the cost down, again, it's probably not there yet."

The problem with broad mining exposure

Owning a large diversified miner feels like copper exposure, but Taylor argues it may be less than investors think. The same revenue diversification that makes BHP and Rio resilient businesses is precisely what dilutes their sensitivity to copper price movements.

"If we go back to a BHP, they have copper exposure, but they also have iron. So potential increases in price and copper could be offset by a different material, whereas this ETF (ASX: CPPR) is more copper purity."

Beyond dilution, miners also behave differently from copper itself through operating leverage. When copper prices rise, fixed costs stay relatively flat, magnifying returns relative to the spot price. The reverse applies during downturns.

"The price return or the return in your investment will be absolutely different to just the pure price change in copper and that's as a result of a thing called operating leverage. So what you actually see in this investment is it's a magnified return of the copper spot price."

CPPR addresses this through a revenue screen requiring at least 40% of revenue from copper mining, and equal weighting that tilts away from the diversified giants toward smaller, purer producers.

"What you get is more of a focus on the small to mid caps and in the copper space, that's actually where the exciting opportunities are, where the growth potential and actually the purity of the miner is higher because they've not diversified as they've gotten bigger."

The risks investors cannot ignore

Despite the constructive long-term outlook, Taylor was careful to highlight the risks attached to copper miners, with political instability among the most significant.

"There's a story of a company called First Quantum and their share price dropped 30% in a day because one of their mines operated in Panama and they decided to have a referendum on their contract in the country."

Taylor also pointed to capital expenditure demands on ageing mines, as well as copper's sensitivity to global economic sentiment.

"Copper's kind of been referred to as Doctor Copper and it's a kind of barometer or a health of the global economy. Sometimes when sentiment is less positive, you can see copper take a little bit of a pullback. So we've actually seen that at the minute where copper's actually decreased the last week or so, obviously with so much political uncertainty and how that impacts global growth."

What the market is still getting wrong

Looking ahead, Taylor believes investors continue to underestimate both the scale of future copper demand and the difficulty of materially increasing supply.

"I think they're underestimating the sheer volume required for what's in store over the next 10 to 20 years for where we're heading and that's going to play a huge part in the price."

On recycling as a solution, Taylor returns to the point with bluntness - that the economics simply don't stack up.

"It sounds like a great idea, but the economics of that, it's a very low margin business. So whether that can produce or make up for the limited supply is a question and I think that's probably underestimated."

He also believes the market may have structurally repriced the commodity to a new, higher baseline.

"I think we've now reached a price floor. I think long gone are the days where it will kind of fall back to what it was five years ago, we've now established a new baseline and I only see it increasing from here."

For investors still assuming they're positioned for that move through their existing holdings, that's the question worth sitting with.

Learn more

For more information on the ETFS Global Pure Play Copper Miners ETF (ASX: CPPR) please click here. 

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ETFS Global Pure Play Copper Miners ETF (CPPR)

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