Freeport-McMoRan Surges 3.3%, Can Copper Premium Resurgence Salvage Tariff-Induced Damage?

Summary
• Freeport-McMoRan (FCX) trades at $40.435, up 3.3% with a 52-week high of $52.61 and low of $27.66
• Intraday range spans $38.76 to $40.55 on 19.2M turnover, outpacing 1.38% turnover rate
• Sector leader Southern Copper (SCCO) jumps 4.4% as metals miners rebound amid COMEX-LME price convergence
Freeport-McMoRan's 3.3% rally defies recent tariff-driven selloff, trading above its 200-day moving average of $40.52. The copper premium collapse has triggered a 10% weekly decline, but bullish technicals and sector rotation suggest short-term volatility could reverse. With Southern Copper surging and copper ETFs gaining traction, investors are weighing whether this rebound is a buying opportunity or a bear trap.

Tariff Exemption Undermines Copper Premium
The Trump administration's decision to exempt refined copper from 50% tariffs has triggered a 30% collapse in the COMEX premium, dragging Freeport-McMoRan shares down 10% this week. As the dominant U.S. copper refiner controlling 70% market share, FCX's earnings model assumed a 20% EBITDA boost from the premium. With COMEX-LME parity re-established at $4.35/lb, the stock trades at 5.2x 2026-2027 EBITDA despite generating $12.9B in projected earnings. The $40.435 price reflects a 3.3% rebound as traders assess whether the 5.2x multiple represents a buying opportunity.

Metals and Mining Sector Volatility as SCCO Outperforms
Southern Copper (SCCO) leads the sector with a 4.4% gain, outperforming Freeport-McMoRan's 3.3% bounce. Copper ETFs show mixed momentum: COPP (+1.09%) and COPX (+0.58%) rise while XLB (-0.96%) declines. The sector's 2025 outlook remains divided between SCCO's production expansion and FCX's tariff vulnerability. While Freeport-McMoRan trades at 5.2x EBITDA, SCCO's 12.3x multiple reflects stronger near-term production visibility.

Options and ETFs for Navigating FCX's Volatility
• MACD: -0.007 (bearish divergence from signal line 0.673)
• RSI: 17.27 (oversold territory)
• Bollinger Bands: $41.53 (lower band) vs. $40.43 (price)
• 200-day average: $40.52 (price slightly below)
• Support/Resistance: 200-day support at $38.75-$39.17, 30-day resistance at $44.79-$44.95

FCX's 3.3% rebound has created a short-term trading opportunity between $38.75 support and $44.79 resistance. The Sprott Copper Miners ETF (COPP) and iShares Copper and Metals Mining ETF (ICOP) offer leveraged exposure to sector rotation. With RSI at 17.27 and price near Bollinger lower band, a bullish breakout above $40.52 200-day average could trigger a 5% upside to $42.45.

Top Options:
• FCX20250808C40 (Call, $40 strike, 2025-08-08 expiration):
- IV: 36.57% (moderate)
- Lverage: 33.74%
- Delta: 0.5987 (moderate sensitivity)
- Theta: -0.119999 (rapid time decay)
- Gamma: 0.16623 (high sensitivity to price moves)
- Turnover: $149,326K (liquid)
- Payoff at 5% upside: $0.435 profit per contract
- Strong gamma and moderate delta make this ideal for a $40.52 breakout scenario

• FCX20250808C41 (Call, $41 strike, 2025-08-08 expiration):
- IV: 34.99% (moderate)
- Lverage: 60.43%
- Delta: 0.4245 (moderate sensitivity)
- Theta: -0.098964 (moderate time decay)
- Gamma: 0.176096 (high sensitivity)
- Turnover: $117,741K (liquid)
- Payoff at 5% upside: $1.435 profit per contract
- High leverage and gamma position this as a breakout candidate if $41.25 is breached

Aggressive bulls should consider FCX20250808C41 into a $41.25 breakout, while COPP offers sector exposure to capitalize on copper ETF rotation.

Backtest Freeport-McMoRan Stock Performance
The backtest of FCX's performance after a 3% intraday surge shows favorable short-to-medium-term gains, with win rates increasing across 3-, 10-, and 30-day intervals. The maximum return during the backtest period was 7.24%, indicating the strategy's potential for capturing positive movements in FCX's price.

Act Now as FCX Navigates Tariff Uncertainty
Freeport-McMoRan's 3.3% rebound suggests short-term oversold conditions may be reversing, but the 5.2x EBITDA multiple remains a discount to sector peers. Southern Copper's 4.4% surge highlights divergent production strategies in the copper space. Investors should monitor the $40.52 200-day average as a key level—break above triggers a 5% target to $42.45, while a breakdown below $38.75 threatens further declines. With COPP and ICOP showing strength, leveraged ETFs offer a safer play on sector rotation. For options, FCX20250808C41 provides high leverage and gamma to capitalize on a breakout.