Investors in Canadian stocks have a new sector in mind that they hope will help insulate their portfolios from the risk of a trade war: copper miners.

At the start of the year traders were piling into shares of Canadian gold miners as tariff-sparked trade friction boosted demand for the precious metal, a classic haven asset.

Now they’re seeking additional winners as they try to navigate the threat of tariffs and expectations for more metal buying from China, where officials are moving to boost the world’s second-largest economy. Copper miners are seen as offering that value.

“Copper’s a similar story” to gold, which up until now has been the obvious bet, said Greg Taylor, chief investment officer at Purpose Investments in Toronto.

Copper miners, including Teck Resources and First Quantum Minerals, got a brief lift to start Monday trading in Toronto after Chinese factory activity showed signs of a recovery and as China’s President Xi Jinping heads into a key political meeting with additional stimulus expected.

“I think there’s a bit of hope that you’re going to see China do something on the stimulus measures,” said Taylor, adding that any steps taken should help copper names.

The momentary boost on Monday signaled the potential for copper stocks to join gold miners in helping the S&P/TSX Composite Index extend this year’s outperformance relative to the S&P 500. Canada’s benchmark has outpaced its US counterpart in five of the past six months despite the repeated tariff threats from US President Donald Trump.

Miners ended the trading session lower along with the rest of the Canadian market after Trump confirmed that the US will go ahead with levies on Canadian and Mexican goods.

There’s an “improved value proposition” for copper mining stocks given some recent volatility in the stocks given the “escalating global trade war,” Scotiabank analyst Orest Wowkodaw said in a note. Capstone Copper Corp. and Teck Resources are his top picks.

LOONIE SUPPORT

The sinking Canadian dollar is another source of support to copper miners. So far, the repeated threat of tariffs and deeper cuts to Canadian interest rates have weighed on the loonie, which isn’t far from its weakest level in decades. For Toronto-listed metal miners, that lower Canadian dollar allows them to capture additional margin when selling their products, which are priced in US dollars.

Materials occupy a 12% weight on the S&P/TSX and benefit from a weaker Canadian dollar. Indeed, materials is the top-performing of 11 sectors in Canada so far this year, rising 11% in 2025 and well ahead of the next-best performing sector — communications —- which has gained 4.5%.

The 13% year-to-date advance in copper comes despite concerns that the base metal will also be subject to Trump’s tariffs, much like steel and aluminum. JPMorgan Chase & Co. noted that “there is no immediate domestic supply sources for the US to replace” its copper imports, so prices in the US would need to push higher.

The bank also cautioned that underwhelming fiscal stimulus from China could weigh on the metal and unwind some of the recent momentum in copper prices. There’s also the potential for more uncertainty if the trading relationship between China and the US deteriorates notably as the trade dispute plays out.

“We’d stay selective of copper equities,” JPMorgan analyst Bill Peterson wrote in a note, adding that he would recommend Teck based on its valuation and potential for growth.