Mining Stocks Surge: A New Supercycle Dawns

Global mining stocks have achieved an impressive nearly 90% gain since the start of 2025, outperforming sectors like semiconductors and technology stocks. This rally is underpinned by robust demand for essential metals, driven by widespread adoption of electric vehicles, AI data centers, and robotics. Copper, crucial for the energy transition, has seen a 50% surge, with other minerals like aluminum, silver, and nickel also experiencing price increases.

Fund managers are increasingly favoring the mining sector, reversing a prior period of disfavor. Pledges from Beijing to support the Chinese economy have reassured investors. Commodities such as copper and aluminum are evolving from short-cycle trades to structural investments, also benefiting from transition strategies that link metals exposure to the AI theme.

The sector's strategic relevance has increased, yet it remains undervalued. The Stoxx 600 Basic Resources index trades at a discount to its long-term average forward price-to-book ratio. This is occurring alongside increased merger and acquisition activity as companies seek scale and portfolio optimization, particularly in copper.

While some caution remains due to the speed of the rally and potential economic surprises, the fundamental drivers for commodities appear strong. Analysts anticipate continued supply deficits, particularly for copper, and project significant upside for gold prices. Consequently, many are planning to gradually increase their exposure to mining stocks.