Market Impact - Freeport-McMoRan shares surged following President Trump's announcement [1] - Potential 50% tariff imposition on copper imports by the US [1] Trade Policy - US considering a 50% tariff on copper imports [1]

Report Industry Investment Rating No information provided in the content. Core Views of the Report - The IMF has lowered the global economic growth rate forecast for 2025 to 2.8%, and trade policy uncertainty will disrupt the global supply chain. The Fed may be cautious about the timing of interest rate cuts, while the ECB may end the easing cycle. China will continue to implement an expansionary fiscal policy and a moderately loose monetary policy in the second half of the year [4]. - In terms of supply, the global copper concentrate supply growth rate is expected to be only 1.7% in 2025 and further decline to 1.4% in 2026. The global refined copper supply growth rate will drop to 2% in 2025. In the second half of the year, domestic small and medium - sized smelters may face production cut risks, and the release of new global refined copper production capacity will be significantly limited [4]. - In terms of demand, copper has become a key strategic reserve resource in the context of global AI and electrification transformation. The global refined copper consumption growth rate is expected to be 3.7% in 2025, and the domestic growth rate will be 3.4% [4]. - The copper price center is expected to continue to rise in the second half of this year, with the risk of periodic high - level corrections due to overseas macro disturbances. The medium - to - long - term upward trend of copper prices remains unchanged. The main operating range of SHFE copper is expected to be 77,000 - 85,000 yuan/ton, and that of LME copper is 9,500 - 10,500 US dollars/ton [4]. Summary According to the Table of Contents 1. Review of the First - Half Market in 2025 - In the first half of 2025, copper prices showed a trend of bottoming out and rebounding. In the first quarter, SHFE copper rose from a low of 73,000 to 83,000 due to supply concerns and macro - economic factors. In the second quarter, prices fluctuated due to trade policy uncertainties, and then rebounded after the Sino - US trade negotiation [11]. - Domestic copper inventory first increased and then decreased. The spot premium changed from discount to premium. In the second half of the year, domestic refined copper spot premium is expected to remain in the premium range, with the center of premium moving up [13]. 2. Macroeconomic Analysis 2.1 Global Trade Situation Eases, and the US Economy Faces Stagflation Risks - The IMF has lowered the economic growth forecasts of major economies in 2025. The Sino - US trade negotiation has reached a preliminary consensus, but the tariff measures after the 90 - day suspension period are uncertain. The US economy has the risk of stagflation, while the eurozone economy shows a weak recovery [15][16]. 2.2 The Fed's Interest Rate Cut Expectations Rise, and the ECB May Slow Down the Rate - Cutting Pace - The Fed may have 1 - 2 small interest rate cuts this year, possibly starting in September. The ECB cut interest rates in June. The future monetary policies of both central banks will be affected by trade policies and economic data [17][19]. 2.3 Strengthen the Domestic Circulation System, and the Central Bank's Monetary Policy Remains Moderately Loose - China's economy faced challenges in the first half of the year. The central bank implemented a series of measures to support the economy. China's economy showed resilience in the first half, and the economic structure is expected to continue to optimize in the second half [21][22]. 3. Copper Ore Supply Analysis 3.1 The Global Concentrate Shortage Exceeds Expectations, and Chinese Enterprises Actively Explore Copper Ore Resources - In the first half of 2025, both Chinese and foreign capital accelerated the development of copper resources. However, the output of major mines was affected by various factors, and the shortage of copper concentrates is expected to exceed market expectations in 2025 - 2026 [25][27]. 3.2 The Global Copper Concentrate Growth Rate in 2025 is Expected to Drop to 1.7% - The planned global copper ore supply increment in 2025 is 115.5 million tons, but the actual increment is expected to be 70 - 80 million tons, with a growth rate dropping to 3%. Considering major interference factors, the actual supply growth rate in 2025 is expected to be only 1.7% and further decline in 2026 [31][33]. 4. Refined Copper Supply Analysis 4.1 Domestic Refined Copper Production Will Slow Down in the Second Half of the Year, and the Annual Year - on - Year Growth Rate May Drop to 4.5% - In the first half of 2025, domestic refined copper output was high, but more than 30% of smelters cut production to some extent. The actual output increment may be significantly lower than expected, and the annual growth rate is expected to slow down to 4.5% [41][43]. 4.2 The Release of Overseas Refined Copper Production in 2025 is Very Slow - Overseas new refined copper smelting capacity in 2025 is only 62 million tons, and the actual output is quite limited. The actual increment is expected to be about 15 million tons [45][46]. 4.3 Refined Copper Imports Will Remain at a Low Level in the Second Half of the Year, and Copper Has Become a Strategic Resource in the Great - Power Game - From January to May 2025, China's refined copper imports decreased year - on - year. In the second half of the year, imports are expected to remain at 25 - 28 million tons per month, and the annual imports will drop significantly compared with last year [48][49]. 4.4 Domestic Scrap Copper Supply is Generally Stable, and Southeast Asia May Fill the Gap in US Scrap Copper Imports - From January to May 2025, China's scrap copper imports decreased slightly year - on - year. The supply of scrap copper is expected to remain stable in the second half of the year, with Southeast Asian imports filling the gap left by the US [66][69]. 4.5 LME Inventories Plummeted by More Than 70% in the First Half of the Year, and the Tight - Balance Reality Has Lowered the Global Inventory Center - As of June 27, global visible inventories decreased significantly. LME inventories are at a low level with a risk of squeezing, while COMEX inventories are rising. Domestic inventories are expected to remain low in the second half of the year [73][75]. 5. Refined Copper Demand Analysis 5.1 This Year's Grid Investment Scale is Expected to Exceed 800 Billion, and the New UHV Grid System is Upgrading at an Accelerated Pace - The planned grid investment in 2025 is expected to reach 825 billion, with an increase of 220 billion compared with 2024. The copper consumption growth rate in grid investment is expected to be 3 - 4% [77]. 5.2 The Real Estate Market is Bottoming Out, and the Real Estate Regulation Policies are Intensifying - The real estate market showed a decline in the first five months of 2025, but the price decline margin narrowed. The market is expected to gradually recover in the second half of the year, with a slight decline in copper consumption growth rate [78][80]. 5.3 The "Two New" Policies Drive the Accelerated Production and Sales of Air - Conditioners - From January to May 2025, air - conditioner production and sales increased year - on - year. However, due to various factors, the production scale may be adjusted in the third quarter, and the export may decline [81][82].

Industry Overview - The world is facing a structural, long-term copper shortage driven by the global transition to a green economy, which requires significant amounts of copper for electric vehicles, wind and solar farms, and modernizing power grids [1][2] - The build-out of artificial intelligence (AI) is creating additional demand for copper due to the energy-intensive nature of data centers that require extensive copper wiring [2] Supply Challenges - Demand for copper is expected to outpace supply due to significant challenges in discovering and developing new large-scale copper deposits, which is a slow and costly process [3] - Many existing major mines are nearing the end of their productive life and are processing lower-quality ore, leading to increased energy and resource requirements for copper production [4] Company Positioning - Freeport-McMoRan (FCX) is positioned to benefit from the rising copper prices, with sales guidance for 2025 projected at approximately 4.0 billion pounds of copper [5] - The company operates with a low net cash cost of $1.65 per pound of copper, meaning that any increase in copper prices directly enhances profitability [11] Financial Strength - Freeport-McMoRan has a strong balance sheet with a low debt-to-equity ratio of 0.30, allowing it to fund growth opportunities without relying on expensive debt [9] - The company has a reliable dividend yield of 0.65% and a commitment to returning capital to shareholders through dividends and a multi-billion-dollar share repurchase program [8][10] Profit Potential - A sustained increase of $0.25 per pound in copper prices could translate into approximately $1 billion of additional annual operating cash flow for Freeport-McMoRan based on its sales guidance [11] - The company's operational leverage means that rising copper prices disproportionately impact its bottom line, enhancing profitability [6] Market Outlook - Analysts have a Moderate Buy consensus rating for Freeport-McMoRan, with a 12-month price target of $48.27, indicating a potential upside of 5.27% from the current price [12][13] - The company's price-to-earnings-growth ratio (PEG) of 0.84 suggests a reasonable valuation compared to its strong future growth prospects [13]

Stock Recommendations - Freeport-McMoRan (FCX) is breaking above resistance at $43 to $45, a level it has struggled with since 2021 [1] - Honeywell's breakup value is expected to unlock shareholder value [1] - Caterpillar's increased customer engagement is projected to increase sales [1] - An unnamed stock is showing a series of higher lows and breaking out above the 200-day moving average [1]

Company Overview - Freeport-McMoRan Inc. is engaged in mineral exploration and development, mining and milling of copper, gold, molybdenum, and silver, as well as smelting and refining of copper concentrates [11] - The company operates primarily through subsidiaries, with its principal asset being the Grasberg mine in Papua, Indonesia, which contains the world's largest copper and gold reserves [11] Investment Ratings - Freeport-McMoRan has a Zacks Rank of 3 (Hold) and a VGM Score of B, indicating a moderate investment outlook [12] - The company has a Momentum Style Score of B, with shares increasing by 9.5% over the past four weeks [12] Earnings Estimates - For fiscal 2025, three analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.07 to $1.69 per share [12] - Freeport-McMoRan boasts an average earnings surprise of 10.5%, suggesting potential for positive performance [12] Investment Considerations - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Freeport-McMoRan is recommended for investors' consideration [13]

Group 1: Investment in Nickel and Copper Industry - Indonesia has attracted over $80 billion in investments for nickel smelting plants over the past decade, and is rapidly becoming a significant player in the copper smelting industry as global demand for copper rises [1] - In the past year, Indonesia has attracted over $9 billion in investments in the copper sector, including a large copper refining facility by Freeport Indonesia in East Java and a new smelting plant by Amman Mineral in West Nusa Tenggara [1][2] - The Indonesian Chamber of Commerce and Industry anticipates more copper smelting plants will emerge, contingent on sufficient financing and long-term investments [2] Group 2: Demand for Copper in Electric Vehicles - Analysts indicate that interest in copper processing plants is increasing, driven by the significant rise in electric vehicle production, with each battery pack for medium-sized electric vehicles containing approximately 10% copper, or about 80 kilograms [2] - By 2030, Indonesia's annual sales of four-wheeled electric vehicles are expected to reach 195,000 units, and two-wheeled electric vehicles are projected to reach 5 million units, with each four-wheeled vehicle requiring 83 kilograms of copper [3] Group 3: Current and Future Copper Production - Freeport Indonesia's copper refining facility in East Java is expected to produce at least 1.1 million tons of cathode copper annually, moving the country from sixth to fifth in global rankings for this category [4] - The new copper refining facility in East Java resumed operations in late May after a temporary closure due to a fire, with a processing capacity of 1.7 million tons of copper concentrate, yielding 650,000 tons of cathode copper [4][5] - Amman Mineral began producing cathode copper in March and is currently fine-tuning new equipment to achieve full and continuous capacity, with a processing capacity of 900,000 tons of copper concentrate [5] Group 4: Investment Potential and Industry Gaps - Indonesia has 220.3 million tons of copper reserves, ranking 10th globally, but its refined copper output ranks 16th, indicating a significant investment potential in the copper refining sector [3] - The current copper processing facilities primarily produce anode copper for decorative coatings and cathode copper for electric vehicle batteries, but there is a lack of facilities for producing sintered copper products for automotive electrical systems [3][4]

Company Overview - Freeport-McMoRan Inc. is engaged in mineral exploration and development, mining and milling of copper, gold, molybdenum, and silver, as well as smelting and refining of copper concentrates [11] - The company operates primarily through its subsidiaries, including PT Freeport Indonesia, Freeport Minerals Corporation, and Atlantic Copper [11] - PT Freeport Indonesia's principal asset is the Grasberg mine in Papua, Indonesia, which contains the world's largest copper and gold reserves [11] Investment Ratings - Freeport-McMoRan has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid overall rating [12] - The company has a Value Style Score of B, supported by attractive valuation metrics such as a forward P/E ratio of 24.84 [12] - Four analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.07 to $1.68 per share [12] Earnings Performance - Freeport-McMoRan has an average earnings surprise of 10.5%, suggesting a history of exceeding earnings expectations [12] - The upward revisions in earnings estimates indicate positive sentiment among analysts regarding the company's future performance [12] Investment Consideration - With a solid Zacks Rank and top-tier Value and VGM Style Scores, Freeport-McMoRan is recommended for investors' consideration [13]

Group 1 - Copper prices are currently consolidating in a tight range between $4.50 and $5 per pound, with a recent peak near $5.25 before Liberation Day, which has been bullish for shares of Freeport-McMoRan (NYSE: FCX) [1] - There are concerns regarding the health of the global economy, which may impact copper demand and pricing [1]

Group 1 - Freeport-McMoRan's copper smelter in Arizona is one of the last three operating copper smelters in the U.S., highlighting the challenges faced in rebuilding the domestic mineral supply chain [1][3] - The U.S. has significant copper reserves, estimated at approximately 47 million tons, ranking seventh globally, yet the average time from discovery to production is 29 years, second only to Zambia [1][7] - The operational costs of U.S. smelters are about three times higher than those overseas, leading many miners to process copper abroad due to lower costs and higher capacity [1][3] Group 2 - The U.S. copper industry peaked in 1997 with 35 mines and 11 smelters producing 1.9 million tons of copper annually, but now only has 25 mines and 2 smelters [7] - China dominates the copper refining market, processing 44% of the world's copper and producing approximately 13 times more refined copper than the U.S. [6][7] - The Resolution copper project in Arizona has recently made progress after a lawsuit from indigenous groups was dismissed, and it has been prioritized for federal approval [4]

Investment Rating - The report maintains a "Recommended" investment rating for the copper industry [9]. Core Insights - The report highlights that the production growth of overseas large copper mining companies is low, and there are frequent disruptions. The lack of new large copper mining projects in the coming years will continue to constrain copper supply [9]. Summary by Sections 1. Copper Production in Major Producing Countries - Chile's copper production from January to April 2025 reached 1.752 million metric tons, a year-on-year increase of 3.57% (+60,300 tons). The growth is primarily driven by the Escondida project due to higher mining intensity and improved ore grades. Peru's copper production during the same period was 892,000 metric tons, up 5.59% (+47,200 tons), with significant contributions from the Las Bambas and Toromocho mines [4][18]. 2. Overseas Copper Mining Companies' Production - The total copper production of 15 major copper mining companies in Q1 2025 was 3.012 million tons, a slight increase of 0.1% (+3,000 tons). However, excluding three Chinese companies, the production of 12 overseas companies fell by 3.79% (-96,100 tons) to 2.436 million tons. Notably, Freeport and Glencore experienced significant declines of 20% and 29.95%, respectively [5][9]. 3. Growth in Chinese Copper Mining Companies - Three Chinese companies reported substantial production increases in Q1 2025: Minmetals Resources (+76.1%), Zijin Mining (+9.5%), and Luoyang Molybdenum (+15.7%). The growth for Minmetals was largely attributed to the Las Bambas mine in Peru, which produced 95,700 tons, a year-on-year increase of 70.9% (+39,700 tons) [7]. 4. Future Project Developments - The report notes a scarcity of new or expanded copper mining projects. The Salvador project by Codelco is currently ramping up production, while First Quantum's Kansanshi expansion is expected to contribute additional capacity starting in H2 2025. Other long-term projects include Rio Tinto's Oyu Tolgoi and Antofagasta's Centinela Phase II, with expected production increases in the coming years [8]. 5. Production Summary of Major Companies - Codelco's Q1 2025 production was 324,000 tons, a slight increase of 1.6% year-on-year. BHP's total production was 513,200 tons, up 10.18%, primarily due to the Escondida mine. Freeport's production fell to 393,720 tons, down 20% year-on-year, while Glencore's production dropped to 167,900 tons, a decrease of 29.95% [47][54][60][69].