FLORIDA – The coronavirus “took the legs out” of copper’s rally and is rattling everyone from miners to equipment suppliers, according to the head of the world’s largest publicly traded producer of the metal.
“Everybody is on edge, and they’re taking it very seriously and the uncertainty around it,” Richard Adkerson, CEO of Freeport-McMoRan, said Monday in an interview at the BMO Global Metals & Mining Conference in Florida.
The virus has dented demand for copper, quashing hopes for a rebound this year. Before the outbreak, traders were betting that a pickup in manufacturing and easing trade tensions would help push the metal higher. Adkerson said that while Freeport hasn’t had significant issues with its supply chain yet, shutdowns in industries in China are causing a buildup of exchange stockpiles.
Copper has dropped more than 7% this year in London, after jumping almost 8% last quarter on optimism over prospects for a US-China trade deal.
A prolonged virus would slow mine development and deepen a production deficit in the metal, he said. The impact of a lengthy outbreak of the disease could also spill over into Phoenix-based Freeport’s parts and maintenance program, according to Adkerson. He said he has spoken with the CEO of Caterpillar, who reassured him it’s still operating its plants in China.
Tom Palmer, CEO of Newmont, the world’s biggest gold miner, said in a separate interview at the conference that his company also isn’t yet seeing an impact from the virus on its operations. The Greenwood Village, Colorado-based producer is monitoring the situation closely, he said.
“The places that we operate are pretty protected from the virus at this stage -- so Canada, the US, Australia, we are not seeing any impact operationally,” Palmer said.