Goldman Sachs' (NYSE:GS) analyst Sal Tharani upgraded Freeport McMoRan (NYSE:FCX) from "Neutral" to "Buy," citing it as the place to be in the broader metal sector.
Downplaying the weakness in the steel industry, Tharani said likes Freeport more because of its copper exposure. He said the balance of supply and demand in 2011 favors the copper segment.
Ongoing demand from China, which consumers over 20 percent of copper, wasn't a certainty too long ago, but appears to be more certain now, and that should benefit Freeport and other copper producers.
While it doesn't seem to be as certain as to supply not being able to meet demand, as Europe and the U.S. are doubtful as to any type of sustainable growth, it will be mostly on China for copper, and if they falter so will the copper industry.
But if copper does thrive in 2011, Tharani believes Freeport is the company best positioned to take advantage of it.