Miners with exposure to U.S. copper prices on the Chicago Mercantile Exchange (CME) are reaping the rewards of President Donald Trump’s recent 50% tariffs on the metal, according to a report from Bank of America. Following the sudden announcement, copper prices surged sharply, with the September futures contract on the CME soaring approximately 13%, marking its highest settlement ever and the strongest daily performance since 1989.
Bank of America analysts have identified two key players in the copper market-Freeport-McMoRan and Southern Copper-as significant beneficiaries of this price surge. Their research indicates that around 36% of Freeport’s projected revenues for 2025 will be linked to U.S. copper prices, while an even larger 40% of Southern Copper’s anticipated sales will derive from CME pricing.
Historically, CME copper prices have outperformed global rates on the London Metals Exchange by about 600 basis points. However, in the wake of Trump’s tariff announcement, this margin has widened dramatically to 1,400 basis points, signaling a striking advantage for producers tied to the CME market.
Lawson Winder, a Bank of America analyst, noted, “For copper producers that sell on CME pricing, this would mean higher realized revenues.” This shift has been reflected in stock performance, with Freeport-McMoRan shares climbing more than 20% year to date, while Southern Copper has seen an increase of nearly 13%.
Looking ahead, Bank of America has assigned a “buy” rating to Freeport-McMoRan, setting a price target of $50, which suggests an upside of 8% from its close on Tuesday. In contrast, Southern Copper has been rated as “underperform,” with a price objective of $75, indicating a potential downside of 27%.
As the copper market continues to navigate the implications of these tariffs, miners linked to the CME are poised to experience significant financial gains. The volatility of commodity prices, driven by political decisions, underscores the ongoing balancing act for investors in this essential sector.
This development marks an important chapter for both miners and investors, highlighting the direct impact of policy changes on market dynamics and the potential benefits for those aligned with CME pricing. As the situation unfolds, stakeholders will be keeping a close eye on future market movements and the broader implications for the global copper industry.
Original Source: https://www.cnbc.com/2025/07/09/two-stocks-that-benefit-most-from-trump-copper-tariffs.html
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Publish Date: 2025-07-09 20:36:00
