Copper Demand Boosts Freeport-McMoRan Amid Energy Transition

Copper demand is growing due to electrification, electric vehicles (EVs), and artificial intelligence (AI) infrastructure. Freeport-McMoRan is the leading U.S. copper producer with potential for production expansion.

The company's supply is crucial for electricity applications, accounting for approximately 70% of domestic refined copper production. This makes it a key beneficiary if tariffs on copper are extended to refined copper products.

EVs have more than double the amount of copper due to extensive wiring, and solar panels also require significant amounts of copper. Additionally, AI data centers are highly energy-intensive, with estimates suggesting U.S. data center demand for electricity will rise from 5% in 2025 to as much as 14% by 2030.

Supply constraints could benefit copper prices, which are currently trading near an all-time high of about $6.50 per pound. Freeport-McMoRan has potential to expand its supply through low-cost leaching initiatives and brownfield expansion plans, including in the U.S. However, industrywide difficulty in matching supply to demand is expected.