While Antofagasta (ANTO) forecasts a copper supply deficit this year only, most analysts expect copper’s supply to fall short of demand over the next decade. The estimates are based on expectations of modest demand growth. However, a major slowdown in China could change the picture. As the world’s biggest copper consumer, the country uses almost half of global copper production.
Meanwhile, Freeport bulls are running short of ideas, possibly due to macro concerns. Copper prices (XME) are sensitive to global macroeconomic developments such as Brexit and US-China trade tensions.
Macro uncertainties have overshadowed copper’s long-term outlook. The fact that 2019 and 2020 are transition years for Freeport and expected to bring lower earnings isn’t helping matters, either.