Commodities: Copper
Freeport was hit ~12% overnight after downgrading FY production guidance. The 1Q result was ahead of expectations, but the guidance was a real issue, particularly given the stock had posted a new all-time highs the night before, showing optimism was running high into the result.
Copper rallied sharply last week on hopes that an end to the Iran War would see the global economy get back to full speed sooner rather than later. Some of the US heavyweight names like Freeport-McMoRan (NYSE:FCX) even punched to new highs on Friday leading the industrial metal – unfortunately local names aren’t going to open with the same bang this morning after the geopolitical reversal on Saturday morning.
Copper advanced another ~1.6% overnight on hopes that global growth will get back on track sooner rather than later. The industrial metal is hardwired into the global economy — construction, vehicles, electronics, and increasingly EVs, which consume significantly more copper than their combustion counterparts. So far in April it’s rallied strongly, with Nymex up ~9%, and the LME not far behind at ~8%. Throwing in another complication, copper is facing significant supply issues this year due to sulphuric acid constraints of all things.
Copper like many markets has been on a roller-coaster ride in recent months as the Iran War threw into question global growth through 2026/7. However, the important tailwinds remain in place for MM with demand set to remain strong over the coming years. Exposure to the industrial metals remains one of our favourites market views, especially from a risk/reward perspective into dips, such as now.
SFR –4.02%: Delivered a mixed quarterly production result, though maintained full-year guidance, albeit at the lower end, as management remains confident in a stronger finish to the year.
ASX Copper (Cu) stocks surged on Wednesday with Sandfire (ASX:SFR) and Capstone Copper (ASX:CSC) both ending the session up by more than 9%. The Wire ETF followed suit closing up ~8% as copper futures popped over 3% on the hopes that any war led global economic slowdown wont be as bad as previously feared.
Copper (Cu) has experienced a volatile few weeks as the Iran conflict brought into question global economic growth, even though it’s underpinned by structural demand from industrial uses, particularly global electrification and the AI buildout.
