"Set to Rise Further Next Year": Lawmakers Rush to Buy Stock Benefiting from Copper Prices and AI Demand [Business & Issue]

Up 20% Despite Weak U.S. Market
Copper Price Surge and AI Industry Tailwinds Fuel Optimism

View of the copper mine in Sedona, Arizona, operated by Freeport-McMoRan. Freeport-McMoRan website

Freeport-McMoRan, the leading copper stock in the United States, has seen a strong rally in its share price, fueled by the global rise in copper prices. Interest from investors has grown as members of the U.S. House of Representatives have also disclosed a series of purchases. With copper prices repeatedly hitting all-time highs and the likelihood of this upward trend continuing into next year, expectations for further gains are rising, especially as the company is also expected to benefit from increasing demand driven by generative artificial intelligence (AI).

Up 20% Amid U.S. Market Correction... House Representatives Rush to Buy

On December 18 (local time), Freeport-McMoRan’s share price closed at $47.92 on the New York Stock Exchange (NYSE). During the fourth quarter of this year (October to December), the stock rose by 22.58%. Given that the S&P 500 index increased by only 0.94% over the same period amid concerns about an AI bubble and a broader market correction, Freeport-McMoRan’s performance stands out as particularly strong.

Despite a landslide at Freeport-McMoRan’s Grasberg copper mine in Indonesia last September that killed seven people and halted operations, the company’s share price continued its upward trend after October. Even with the aftermath of the mining accident, Freeport-McMoRan reported third-quarter sales of $6.97 billion on October 23, a 7.7% increase compared to the same period last year.

Investor interest has grown even further following disclosures that U.S. lawmakers have been actively buying Freeport-McMoRan shares. According to Capitoltrades, a site that aggregates stock transaction disclosures by U.S. politicians, ten members of the U.S. Congress-including Republican Representative Lisa McClain and Democratic Representative Gil Cisneros-reported purchases of Freeport-McMoRan shares this year.

Copper Prices at Record Highs... Expected to Surpass $15,000 Next Year

After breaking the all-time high of $10,000 per ton in September, copper prices have continued to set new records, driving Freeport-McMoRan’s share price higher. With a series of accidents at copper mines worldwide disrupting production this year, the outlook is for continued price increases next year due to ongoing supply shortages.

On December 17, the spot price of copper on the London Metal Exchange (LME) reached $11,727.20 per ton. Since surpassing the $10,000 mark on September 15 at $10,124.57, copper prices hit another record high of $11,896.76 on December 11 and have since remained elevated in the $11,700-$11,800 range.

Fears of supply disruptions have kept copper prices on an upward trajectory. In addition to the Grasberg mine accident, a flood at the Kamoa-Kakula copper mine in the Democratic Republic of Congo in May halted operations, and in July, a tunnel collapse at Chile’s El Teniente copper mine also suspended production. As a result, global copper supply is expected to decrease in the short term, making it difficult for prices to decline.

On December 15 (local time), global investment bank Citigroup reported, “Amid concerns about declining copper production, many companies-especially in the United States-are rapidly stockpiling copper, which is fueling the price surge. We forecast that copper prices will rise to $13,000 per ton early next year and reach $15,000 in the second quarter.”

AI-Driven Demand Boosts Revenue... "Share Price Could Break $60"

AP Yonhap News

The company is also benefiting from increased copper demand due to the expansion of AI data center construction and power grid projects. Massive amounts of copper are required for power supply equipment, high-voltage connections, and communication wiring for AI data centers.

According to a recent report by the International Energy Agency (IEA), global copper demand reached 27 million tons last year and is growing by 3-4% annually. Demand is projected to rise to 33 million tons by 2035 and 37 million tons by 2050. The IEA noted, “In addition to demand from AI data centers and power grid expansion, copper demand for electric vehicles-which require more than four times as much copper as internal combustion engine vehicles-is increasing rapidly.”

With copper prices expected to remain high over the medium to long term, there is growing optimism that Freeport-McMoRan’s share price could climb to the $60 level. Barron’s, a U.S. investment publication, projected, “As copper prices continue to rise and Freeport-McMoRan’s sales growth is expected next year, the share price is likely to steadily increase to the $55-$60 range.”