Freeport-McMoran Copper & Gold (NYSE:FCX) says China's attempt to combat inflation by slowing down their economy could significantly reduce demand for copper going forward.
Copper prices have fallen 15 percent over the last couple of months, and is sure to experience some more downward pressure because of the news from China.
This would also put pressure on margins for Freeport and any company with a strong exposure to copper.
Freeport has plans to spend $100 million in 2010 for copper and gold exploration based on assumptions demand will continue. While for gold that's the case without a doubt, copper looks like it could be in for a rough ride as the U.S. market levels and Europe continues to struggle.
1 comment:
While China is tightening it's monetary policy it is providing it's citizens much incentive to purchase electric drive vehicles in an effort to combat a huge polution problem. Motors and chargers for these vehicles are very copper intensive. China is not the only country doing that. I am betting on copper.
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