Copper1 Mar 2021 08:15
From the Times
Freeport signals enduring cash bonanza from copper price boom
Top listed producer’s chief expects supply constraints and robust demand to persist
Freeport’s copper and gold mining facility at Grasberg, Indonesia. The copper price broke above $9,000 a tonne last week for the first time since 2011 © Dadang Tri/Bloomberg
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Neil Hume, Natural Resources Editor 3 HOURS AGO
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Copper’s rise to its highest price in a decade is no temporary “spike” but a reflection of strong underlying fundamentals, the head of the world’s biggest listed producer said as his company prepares to step up its output.
Richard Adkerson, chairman and chief executive of Freeport-McMoRan, said stocks were already at their lowest level since the mid-2000s even though many big economies were still hampered by Covid.
“This is not a spike like we’ve seen in oil and natural gas prices because of cold weather in Texas, because there is a lot more fundamental support for the copper market,” Adkerson told the Financial Times. He added that “from a supply standpoint, copper cannot be turned on with a spigot”.
Copper is used in everything from power cables to electric vehicles and demand is expected to increase in coming years because of the “greening’’ of the global economy.
Tackling carbon emissions is not impacting today’s price in any significant way but it will impact demand in a very significant way going forward
Richard Adkerson
After dropping to $4,600 a tonne last March, its price has doubled on the back of supply constraints and strong demand from China. It broke above $9,000 a tonne last week for the first time since 2011 as speculators started to pile in, with one Chinese brokerage amassing a $1bn long position in the metal.
If demand holds up, several big investment banks including Goldman Sachs reckon copper could surpass its 2011 high of $10,190 a tonne.
“There is still recovery to happen. Now there could be another curveball tomorrow, and we have to be prepared for it, but copper prices are strongly supported by fundamentals,” said Adkerson.
While there was much discussion about the role copper would play in the electrification of the global economy, Adkerson, who became Freeport CEO in 2003, said it had yet to affect the 23m tonne a year market.
“Tackling carbon emissions is not impacting today’s price in any significant way but it will impact demand in a very significant way going forw
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