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FCX is a leading copper producer
The stock exploded higher since its March 2020 low
Copper corrected and pushed FCX lower
Goldman Sachs: Copper Rest; will continue its ascent
Levels to watch in FCX ??- Buy the dip
In May 2021, three commodities traded on US futures exchanges rose to new all-time highs.
received a lot of attention when the price broke above the $1700 per 1,000 board feet level. , the platinum group metal and critical ingredient in automotive catalytic converters that remove toxins from the environment, rose above the $3,000 an ounce level. , the red nonferrous metal that is a building block of infrastructure and an ingredient in the new green revolution when it comes to EVs and other eco-friendly products, went to nearly $4.90 a pound.
The move to copper has been a boon for the companies that extract copper ore from the Earth's crust. Freeport-McMoRan Copper & Gold (NYSE:) is one of the world's leading copper producers and its stock price has soared since its March 2020 low. sales can be zone.
FCX is a leading copper producer
Freeport McMoRan is one of the world's leading copper producers. In 2020, Codelco, the Chilean copper mining giant, led the world into production, producing 1.73 million tons of the base metal. BHP Billiton (NYSE:), the Anglo-Australian mining giant, was close behind with 1.72 million tons of copper production. Freeport McMoRan came in third with 1.45 million tons, ahead of Glencore in fourth (OTC:), with 1.26 million tons of output.
At $32.40 per share on July 19, FCX had a market cap of $47.48 billion. The stock trades more than 20 million shares per day on average and pays shareholders an annual dividend of $0.30, a 0.90% return on the stock.
The stock exploded higher since its March 2020 low
FCX shares rose significantly after hitting their lowest level since early 2016 in March 2020, when the stocks hit a higher low at $4.82.
The chart shows its rise to a high of $44.50 per share in early May, a move more than nine times higher in fourteen months. At the time, FCX was trading at its highest price since 2012.
Copper corrected, pushing FCX lower
In May 2020, COMEX copper futures traded to an all- time high.
Source: CQG
As the quarterly chart illustrates, the near futures contract reached $4.8985 per pound, eclipsing the 2011 record high of $4.6495. Copper corrected to a low of $4,088 on the near contract since the all-time high. At nearly $4,2000 on July 19, the red nonferrous metal was 14.3% below its May high.
Meanwhile, FCX shares have corrected 27.2% from the July 19 highs.
Mining stocks tend to be leveraged to the raw materials they extract from the Earth's crust. FCX outperformed copper upward as the red metals price surged from a low of $2.0595 in March 2020 to a high of nearly $4.90, or 137.8%. FCX exploded over 820% higher in the period.
Bull markets rarely move in a straight line, and the copper correction since May has kept the price above the $4 per pound level so far.
Goldman Sachs: copper rust; will continue to advance
Copper is an essential requirement for the emerging green economy. Electric vehicles need copper, as do wind and solar energy. The construction of infrastructure in China and reconstruction in the US will increase demand for copper in the coming years. In addition, the shortage of semiconductors will increase the demand for copper.
Meanwhile, the lack of new copper projects poses a challenge to metal supply and demand. It takes eight to ten years for new mine production to come online.
Goldman Sachs recently called copper 'the new oil' and said the red metal is essential for decarbonization. Goldman predicts the price could rise to $15,000 per tonne or higher in 2015. Copper peaked around $10,700 per tonne on the London Metals Exchange as COMEX futures hit their most recent high.
Goods performance 2021
According to a study by White & Case, "copper is expected to outperform other mining commodities in 2021," according to our respondents.
Levels to watch in FCX ??- Buy the dip
The first level of technical support in FCX ??stock is at the $29.45 level, the lowest level as of late March 2021.
Below is the support at $24.71, the low of late January 2021. The technical resistance is at the high of $44.50 in May and the early 2012 high at $48.64.
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Demand for copper will continue to increase in the coming years. FCX offers investors and traders leveraged exposure to the red metal. I am a slimming buyer of FCX stock starting at $32.40 per share, leaving plenty of room to add more stock due to price weakness.
Rising demand means the world's third-largest copper producer has great upside potential to move higher in the coming years.
