The copper price was holding steady at $2.75 a pound ($6,060 a tonne) on Wednesday, trading 7% above its summer lows.
That did not stop investors punishing the sector, however, with top listed copper miner Freeport McMoran dropping nearly 8% to a new 52-week low. Major producers Southern Copper Copper, First Quantum and KGHM also fell to the lowest in a year.
Copper is down 16.7% so far this year and trade tensions between the US and China combined with a stronger dollar is taking most of the blame for the uncertain price outlook.
The US has pledged to up tariffs on Chinese goods in January next year which will hurt an already slowing manufacturing sector in the country. China is responsible for nearly half the world’s copper consumption.
Bloomberg reports Freeport CEO Richard Adkerson told analysts on the miner’s third-quarter earnings conference call on Wednesday the gloomy outlook and uncertainty is prompting the Phoenix-based company to slow plans for large scale expansion projects despite predictions of a market deficit.
Reduced spending on projects will add to the impending supply gap in copper markets, Adkerson said, adding that the company view remains unchanged and long-term fundamentals for the bellwether metal are increasingly strong:
“It is a paradox right now: physical markets are tight, fundamental drivers remain very positive and yet sentiment about the commodity and about companies like ours in the investor marketplace is what it is.
Speculators are bearish about copper “due to macro-drivers, and this is having a significant impact on price.”
Adkerson also said Freeport, which expects to mine 1.7m tonnes of copper this year, isn’t looking to sell itself right now.
Earlier this month Bloomberg reported Adkerson said any strategic move would be possible – as long as it’s in the best interests of shareholders – after the company cedes majority control of its Grasberg mine in Indonesia to local interests.
That complicated transaction is expected to be completed by the end of this year or the beginning of 2019.