Stars at night are big and bright, deep in the heart of FCX!

Matein Khalid
Dr. Copper supposedly boasts a doctorate in economic forecasting because its price predicts inflection points in the global industrial cycle and Freeport-McMoRan (FCX) is the largest listed copper miner on earth, with gold and oil drilling businesses as ancillary SBUs. Dr. Copper is not exactly my fav prognosticator of the economic cycle but I do notice a mini price breakout of the red metal on the LME, where 3-month futures now trade at $9600 a metric ton. A month ago, amid trade wars, tariff and recession angst, I had accumulated FCX at 34 as I believed that the electrification/ decarbonization of the world would make copper the ultimate strategic green metal of the 2020s. The ESG mafia has deeply inhibited new mine output growth at a time when the annual copper deficit could rise to as high as half million metric tons due to AI, EV, automation, energy transition and renewables related surges in copper consumption.
Copper production is hostage to labour disputes in Chile, geopolitical trauma (DR Congo), sanctions on Russia, King Leopold, Mobutu, Joseph Conrad and Robert Friedland's heart of darkness, sovereign credit woes in Zambia and water supply problems in the Atacama desert. A New York hedge fund manager who made $2 billion trading copper at a Wall Street I-Bank told me that the clearing price of copper would almost have to double to 18,000 in the next 5 years if the energy transition is to succeed. So I am only too happy to accumulate a strategic position in FCX at 35 and itch for the real time breakout I saw in the charts last night at 40 to add a lot more juice to my bottom line on this trade.
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Given past correlations between FCX share price and the price of LME copper, I expect this puppy to easily rise to 45-46 this summer before I cry sayonara on this trade. Freeport-McMoRan is all set to be a Trump darling because it alone can help America reduce its 45% import dependency on foreign refined copper, a critical metal for an advanced $28 trillion industrial economy. After all, FCX provides 70% of the copper used for domestic US refined production. Note that Trump's tariff threats on imported refined copper means the domestic red metal now trades at a 13% premium, a DonnyT windfall not reflected in FCX when it traded at 34 on the NYSE. If US copper commands a 13% price premium over foreign imports for the rest of 2025, FCX bottom line windfall could be as high as $800 million.
Everything the Trump White House says and does convinces me that the Big Guy has blessed FCX as the All-American champion in global mining and in Trumpworld, Yankee Doodle Dandy must always win the gold medal. Always!
Management projects $15 billion in EBITDA if Dr. Copper trades at $5 a pound on the Chicago Merc next year, which I 100% believe it will. FCX trades at a mere 3.84X EBITDA at its current price of 40 as I write. So this is no time to say tata to my nicely fattening little copper bunny. FCX 46? You bet, cowboy. Why? Coz the stars at night, are big and bright, deep in the heart of Texas!
Also published on Medium.
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