Why surging ASX 200 copper stocks like Sandfire and BHP shares are ‘vulnerable’

S&P/ASX 200 Index (ASX: XJO) copper stocks are shooting the lights out today.

In afternoon trade on Wednesday, the ASX 200 is up 2.6% as investors digest news of a two-week ceasefire in the Iran war.

And the copper miners are charging ahead of those gains. That’s because a resolution in the Middle East conflict would reduce the forecast pressure on global growth and, accordingly, increase forecast demand for crucial industrial metals like copper.

Indeed, since the outbreak of the war at the end of February, the copper price has fallen by almost 8% to US$12,313 per tonne. Mind you, that’s still up 41% since this time last year.

And with investors hopeful that the war could be nearing an end, here’s how these three leading ASX 200 copper stocks are tracking today and over the past 12 months:

• BHP Group Ltd (ASX: BHP) shares are up 3.6% today at $54.84 and up 55.0% in 12 months
• Sandfire Resources Ltd (ASX: SFR) shares are up 10.5% today at $18.26 and up 108.3% in 12 months
• Capstone Copper Corp (ASX: CSC) shares are up 9.2% today at $12.46 and up 85.4% in 12 months

While Sandfire Resources and Canadian-based Capstone Copper are relatively pure play copper stocks, you may be surprised to see BHP shares on this list.

But when BHP reported its half-year results (H1 FY 2026) in February, investors learned that at US$8 billion, copper contributed more than half the miner’s earnings for the six months, surpassing iron ore for the first time.

For the full 2026 financial year, BHP expects to produce between 1.9 million and 2.0 million tonnes of the red metal.

ASX 200 copper stocks facing ‘near-term risks’

When it comes to the US and Israeli war with Iran, investors would do well not to be overly exuberant amid the early ceasefire news.

“Investors shouldn’t mistake this pause for a resolution,” eToro market analyst Josh Gilbert said.

“A two-week ceasefire window is welcome news for risk assets broadly, but the reality is we’ve seen patterns like this before, and the underlying uncertainty can persist,” he added.

And ASX 200 copper stocks like BHP and Sandfire could prove particularly vulnerable to a prolonged conflict in the Middle East.

That’s according to the analysts at Goldman Sachs, who warn of potentially slumping global demand for the red metal, should the war persist (courtesy of The Australian Financial Review).

According to Goldman Sachs:

We see the near-term risks as skewed to the downside if strait flows remain disrupted for longer than our base case, which would keep energy prices higher for longer and likely slow global economic growth.

And the big one-year share price gains posted by BHP and its rival ASX 200 copper stocks may have been partly driven by overvalued global copper prices.

Goldman Sachs noted:

The copper price continues to trade well above our 2026 fair value estimate of about US$11,100 … which would fall below US$11,000 under our economists’ severely adverse scenario of a 1.2 percentage point hit to global GDP growth from the energy price spike.

Our fair value estimate takes into account price support from the ex-US market balance and adds a 25% probability of broad strategic copper stockpiling. This means that the copper price is not being supported at the current level by fundamentals, making it vulnerable to another move lower should the economic outlook deteriorate and investors de-risk.

Stay tuned!

The post Why surging ASX 200 copper stocks like Sandfire and BHP shares are ‘vulnerable’ appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.