Why Buying Copper Stocks Is a No-Brainer
The bull-and-bear debate around the prospects for copper and copper mining stocks, like Freeport-McMoRan (NYSE: FCX), continues to rage on. On the one hand, the bears are pointing to the effect of a slowing economy on demand and the sell-off in the price of copper (since May) as merely the start of a longer-term correction. On the other hand, the bulls argue that both the demand and supply are favorable for the copper industry over the long term. Here's a look at both arguments and what investing in copper today looks like a no-brainer investment.
It's been a volatile year for the copper sector. The price of copper was around $4.10 per pound a year ago, only to rise to nearly $5 per pound in the spring due to a combination of the supply chain crisis and the onset of war in Ukraine, leading to a greater willingness to pay higher spot prices.
For example, Ukraine is a major supplier of copper wiring harnesses used in the automotive industry. The lack of supply caused automotive production curtailments and a scramble to secure copper supplies. Fast forward to the fall, and the price slumped to $3.45 per pound as the market worried over a global economic slowdown, mainly a decline in China's construction market.
Source Fool.com
