US-based copper miner Freeport-McMoRan (FCX) is having a strong run this year. As of January 18, Freeport had gained 21.8% year-to-date. Other copper miners are also strong, with Southern Copper (SCCO) and First Quantum Minerals (FM) rising 4.9% and 15.0 %, respectively. Meanwhile, diversified miners Vale (VALE) and BHP (BHP) have risen 7.4% and 3.7%.
Freeport’s upward price action is a welcome break for investors. The stock fell sharply last year as copper prices plunged. Although copper has recouped some of its losses and is trading above the psychologically crucial level of $6,000 per metric ton, China’s copper imports have fallen year-over-year for two months straight, dampening copper market sentiment.
Nonetheless, copper’s long-term fundamentals are much better than steel’s and aluminum’s. Global copper markets could be headed for a structural supply deficit in the next decade unless the Chinese economy cools off significantly. Previously, we noted that Freeport’s fundamentals look strong despite the short-term noise. Also, its stock seems to have caught up with copper.
We’re now into the fourth-quarter earnings season, and Freeport-McMoRan is scheduled to release its earnings on January 24. In this series, we’ll discuss analysts’ expectations for the company and key updates investors will be watching for in Freeport’s fourth-quarter earnings call.