Citi analysts are projecting a surge in copper prices, anticipating record highs in the coming year due to disruptions at key mines operated by Freeport-McMoRan, Teck Resources, and Ivanhoe Mines. On a noteworthy note, Freeport-McMoRan’s stock saw a significant increase, positioning it among the top gainers in the S&P 500, while other major players like BHP Group and Rio Tinto have also entered favorable buying ranges.
After a critical incident on September 8 at Freeport’s Grasberg mine in Indonesia, which tragically resulted in the deaths of two workers and the ongoing search for five others, Citi upgraded Freeport’s stock from neutral to buy. The firm maintained a price target of $48, even as the stock faced a temporary sell-off.
### Supply Issues and Future Outlook
On September 24, Freeport-McMoRan reported that the mine’s production would see a dramatic decrease, with Q4 sales now expected to be largely insignificant compared to initial estimates of 445 million pounds of copper and 345,000 ounces of gold. This situation is compounded by projections that suggest production in 2026 will be 35% lower than previously expected.
Teck Resources also reported reductions in its output forecasts, trimming anticipated production from its Quebrada Blanca mine in Chile for both 2025 and 2026. Meanwhile, Ivanhoe Mines faced similar challenges when seismic activities flooded its Kakula mine in the Democratic Republic of Congo, leading to a downgraded production outlook.
Citi’s commodities analysts recently highlighted their expectation for copper prices to reach approximately $12,000 per ton over the next six to twelve months, with an optimistic scenario predicting prices up to $14,000 per ton. With the historical high on the London Metal Exchange sitting around $11,100, the current price near $10,643 suggests a bullish trend driven by demand.
### Strategic Positioning in Stocks
Wells Fargo has commenced coverage on Freeport-McMoRan, assigning it an overweight rating with a target of $47. They underscore that higher commodity prices, driven by a tighter market in 2026, should help mitigate losses from Grasberg’s production. The recent challenges in supply chains have created what some analysts believe is a strategic opportunity for investors to acquire copper-focused stocks at a discount.
In recent trading sessions, Freeport’s stock gained 5.4%, re-establishing itself above its 50-day moving average, an important technical indicator. Meanwhile, BHP Group’s stock climbed 1.6%, breaking through a critical buy point, benefiting from its strong copper revenue, which represents a significant portion of its earnings. Rio Tinto also experienced a boost, gaining 1.8% and indicating robust cash flow growth attributed to copper and aluminum.
Ivanhoe Electric, also founded by resource magnate Robert Friedland and engaged in copper projects in the United States, rose by 7.6%, further exemplifying the positive momentum in copper investments.
### Conclusion
As demand for copper continues spurred by structural shifts in energy and technology, the outlook for both prices and stock performance remains optimistic. Analysts emphasize the potential for significant returns as production limitations stabilize, proving essential for investors looking to capitalize on emerging market trends in the resource sector.
