Freeport McMoRan (NYSE:FCX) -4.8% pre-market Friday as copper prices plummet to their lowest in nearly two months, weighed by the strong dollar and fears of a recession that would hurt demand for industrial metals.
According to Reuters, three-month copper (HG1:COM) on the London Metal Exchange recently was -3.2% to $7,430/metric ton for its weakest level since July 25.
Other major producers of copper and other base metals also are indicated lower, including (RIO) -5.6%, (BHP) -4.7%, (VALE) -3.9%, (TECK) -3.4%, (HBM) -3.4%, (SCCO) -3.5%.
ETFs: (NYSEARCA:CPER), (NYSEARCA:COPX), (JJC), (JJCTF)
Also dampening copper sentiment is a 20% increase in LME copper inventories during the past week.
Among other metals, LME aluminum, zinc, lead, nickel and tin all trade lower by at least 1%.
The price of copper has dropped by a third since March, but some large miners and metals traders foresee a massive shortfall emerging in the coming years, exacerbated by the recent downturn and under-investment in mining.
Freeport McMoRan (FCX) has warned that current prices are too weak to support new investments, and Newmont (NEM) recently delayed plans for a $2B gold and copper project in Peru.
“All the signs on supply are pointing to a fairly rocky road if producers don’t start building mines,” CRU Group analyst Piotr Kulas told Bloomberg.
Goldman Sachs has forecast the benchmark LME copper price will double to an annual average of $15K/ton by 2025.