Commodities: Copper
EV’s use up to 4x more copper than conventional vehicles pointing to increasing demand in the years ahead. While we are mindful of the cyclical nature of all commodities when there’s an underlying demand story looming on the horizon we remain keen to buy any weakness i.e under $US400/lb.
Copper is often regarded as a leading indicator of future economic strength and the dip over the last fortnight is another illustration, along with the lacklustre 10-year bond yields, that investors are concerned that looming rate hikes will stifle economic growth plus of course China continues to be its unpredictable self. We believe moving into 2022 optimism will again return to financial markets which should assist the Resources Sector.
Freeport-McMoRan Inc. (FCX) is a mining company. The Company operates through geographical assets with proven and probable reserves of copper, gold and molybdenum, and traded copper producer. The Company’s segments include refined copper products, copper in concentrate, gold, molybdenum, oil and other. The Company’s segments include the Morenci, Cerro Verde, Grasberg copper mines, the Rod & Refining operations and the United States (U.S.) Oil and Gas Operations. The Company has organized its operations into five divisions, which include North America copper mines, South America mining, Indonesia mining and Molybdenum mines. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits, and mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America.
Equity markets are often referred to as weighing machine since a famous investor from Omaha, Nebraska coined the phrase almost 50-years ago way back during the awful bear market of 1973-74. In our opinion the current market uncertainty and sector rotation is being caused by investors continually re-evaluating whether the strong post COVID economic…
