Freeport-McMoRan Leads U.S. Copper Market with 7.9 Billion Shares Traded Ranking 100th

On July 11, 2025, Freeport-McMoRan (FCX) experienced a significant decline, with its stock price dropping by 1.80%. The trading volume for the day was substantial, reaching 7.90 billion, placing it at the 100th position in terms of trading volume for the day.

Freeport-McMoRan's stock performance is closely tied to two critical factors: the $40.92 support level and the evolving U.S. tariff policies. A breach below this support level could trigger a further decline in the stock price.

The newly announced 50% tariff on copper imports by the Trump administration, effective from August 1, 2025, has transformed the U.S. copper market into a competitive arena. This policy aims to boost domestic production and reduce reliance on foreign imports, with nearly half of the imports coming from Chile. This move has created a structural advantage for Freeport-McMoRan, which dominates the U.S. copper production market.

Freeport-McMoRan accounts for 70% of the nation's refined copper output, with key operations such as the Morenci mine in Arizona, which produces 400,000 tons of copper annually. This dominance not only ensures volume but also provides control over the supply chain during a period when tariffs are used to protect domestic industries.

The tariff is not just a temporary tax but a strategic barrier to foreign competition. The COMEX-LME premium, where U.S. copper prices on the COMEX exchange trade at a 13% premium over London Metal Exchange (LME) prices, reflects the immediate impact of the tariff. This premium makes imported copper 13% more expensive, translating to pure profit for Freeport-McMoRan. Every $0.10 per pound premium adds $135 million to the company's annual EBITDA.

Freeport-McMoRan's U.S. operations have a net cash cost of $1.50 per pound, significantly lower than global peers. The company's Indonesian Grasberg mine, equipped with a new smelter, reduces third-party processing fees, further lowering costs. Additionally, U.S. tax incentives and royalty exemptions amplify Freeport's margins.

The 50% tariff rate effectively blocks cheaper imports, forcing U.S. buyers to choose between paying more for imports or relying on Freeport's domestic supply. Global copper production is concentrated in politically unstable regions, making Freeport's domestic supply a reliable option.

Freeport-McMoRan is actively expanding its capacity and diversifying its revenue streams. The company has initiated a new program targeting the extraction of copper from low-grade stockpiles, aiming for 300 million pounds annually by year-end and 800 million by 2028. This could double U.S. production without the need for new mines. The Grasberg smelter project, despite delays, will cut costs by eliminating external smelting fees, freeing up capital for U.S. investments. Additionally, Freeport has formed a strategic partnership with C3 Metals for the Bellas Gate project in Jamaica, adding long-term reserves and spreading geopolitical risk.

Analysts at Morgan Stanley and JPMorgan have raised their price targets for Freeport-McMoRan to $56 and $48.26, respectively, citing the company's tariff-driven EBITDA upside. The stock's current valuation is 5.8% below these targets, making it a compelling buy. However, there are risks to consider, including Indonesia's political risks, water scarcity in South American mines, and regulatory hurdles. Despite these challenges, Freeport-McMoRan's position as the "America's Copper Champion" remains unassailable, and investors are advised to buy the stock now.