Freeport CEO: Making America Great Again is Nice, But We Need China to Be Great Otherwise Copper is Going Down

For all of you copper longs out there — thinking Donald Trump’s wall made from pure copper was going to cause a bull market in the sector are wrong and the FCX boss said as much today.

“In terms of being a long-term driver of copper prices, it will have an impact but not a huge impact,” Richard Adkerson, chief executive officer of the world’s largest publicly traded copper miner, said Wednesday in an interview at Freeport’s office in Lima. “For copper demand to be robust requires a positive economic situation in China, in the world’s global economy.”

Any spike in copper prices is welcomed by FCX — but if China isn’t kicking our ass through trade — then it’s all transitory.

However, any boost to copper prices from infrastructure spending under the Trump administration could be offset by more protectionist U.S. trade policy, Adkerson said. “Global trade is an important factor for the global economy, so we don’t know how these positions on trade that were expressed during the campaign will be put into place. It’s too early to assess.”

While the surprise Trump victory has helped copper prices, which are up more than 3.5 percent since the election, the Chinese market remains the main driver for total global demand, according to Robert Edwards, a managing consultant at CRU Group.

“There’s a bit more to it than just the U.S. election,” Edwards said Wednesday in an interview at an industry conference in Naples, Florida. As long as demand holds steady, the copper market has an attractive outlook with supply unable to grow as it has in past years, Freeport Chief Financial Officer Kathleen Quirk said Wednesday at a conference in New York. The market is close to being balanced and global warehouse inventories aren’t at historically high levels. It wouldn’t take much in terms of additional demand or supply interruptions to throw the market into deficit, she said.

The good news is CNY is down for a 10th day v the dollar and their currency manipulating schemes are working. However, once Trump gets into office and declares them currency manipulators and slaps the shit out of them with 45% levies, this whole run in FCX and copper might be revoked and slammed back down into the pits of hell.