Why Shares in This Hot Copper Mining Stock Soared This Week

Shares in copper miner Freeport McMoRan (NYSE: FCX) rose by 16.6% in the week to Friday morning. The move comes after China's central bank took some widely anticipated measures to stimulate growth in the Chinese economy. In turn, that encouraged investors to buy copper -- China is seen as the swing factor in demand for copper -- and the price of copper rallied from around $4.27 per pound at the start of the week to $4.58 per pound at the time of this writing.To get a flavor of how movements in the price of copper impact Freeport, management states that its earnings before interest, taxation, depreciation, and amortization (EBITDA) in 2025/2026 will change by $430 million with every $0.10 per pound movement in the price of copper. That's a significant change, as Wall Street analysts are forecasting an EBITDA of $10.6 billion for the company in 2024. The move highlights one of the traditional critical drivers of the price of copper: demand from the metal's broad-based exposure to cyclical growth in the industrial economy. It's a metal commonly used in construction (China is trying to stabilize its real estate/construction industry by injecting liquidity into its banking system), as well as transportation, electricity networks, and industrial and consumer products.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool