Southern Copper Shares Approach Peak Valuation Amid Copper Surge

The equity of Southern Copper is trading near its recently established all-time high, propelled by unprecedented copper prices and operational efficiency. However, this rally is accompanied by increasing market volatility and caution.

Southern Copper's position as a low-cost producer allows it to capitalize significantly on the current commodity boom. Copper prices have soared to approximately $6 per pound, a record high driven by a global supply deficit and robust demand, particularly from sectors related to the energy transition and artificial intelligence infrastructure.

Recent operational metrics underscore this advantage. The company reported cash costs of just $0.42 per pound of copper produced, substantially below the industry average. While pure copper output declined by 7% due to lower ore grades at mines in Peru and Mexico, this was more than offset by a surge in by-product metals. Zinc production jumped by 46%, with silver and molybdenum output rising by 16% and 8%, respectively.

Should investors sell immediately? Or is it worth buying Southern Copper?

Record Levels Bring Investor Hesitation

The share price momentum has been vigorous but is now showing signs of investor unease. Following a strong single-day advance of over 6% last Monday, market sentiment appears divided. Unusually high trading volumes in put options suggest institutional investors are increasingly hedging their positions near the peak. Concerns about a potential short-term correction are mounting.

This caution is understandable given the elevated valuation. Southern Copper currently trades at a price-to-earnings (P/E) ratio of about 35.8, placing it at the higher end of its historical range. Technical indicators, including the Relative Strength Index (RSI), signal the stock is moving into overbought territory. Counterbalancing this is the firm's solid financial foundation, exemplified by an unbroken 30-year history of dividend payments.

All eyes are now turning to the upcoming quarterly report. The company is scheduled to release its Q4 2025 financial results on February 11, 2026. Market experts are forecasting earnings per share of $1.46, which would represent a substantial year-over-year increase. Whether the shares can surpass their record high of $171.08 before this announcement will be the next test of market confidence.