What happened

Shares in copper and gold miner Freeport-McMoRan (FCX -2.21%) rose 14.5% in April, according to data provided by S&P Global Market Intelligence. The move came down to a combination of a good set of first-quarter earnings and a sharp increase in the price of copper through the month.

With the price of copper rising from slightly less than $4 per pound to around $4.50 per pound through April, Freeport's share price was always going to receive a lift. In addition, the company's earnings report highlighted the fact that a higher price of copper means a higher profit margin for Freeport. While it's true that Freeport's estimate for net unit cash cost went up from $1.25 per pound of copper to $1.33 per pound, its price assumption for copper went up to $4 from $3 previously.

A bundle of copper wiring

Image source: Getty Images.

So what

The upward trend in the price of copper demonstrates strong demand coming from the recovery in the industrial economy. The metal is the most cyclically sensitive of all commodities. As the economy opens up and spending is released on construction, electrical networks, transportation, and industrial machinery, demand for copper will likely increase.

Furthermore, it's not just about a cyclical recovery. Copper is also a backdoor way to play the energy transition. For example, electric vehicles require three to four times more copper wiring than internal combustion engine cars do, and solar and wind power farms will require an extensive amount of copper for use in storage and transmission.

Now what

As ever, all eyes are on the price of copper. In addition, investors in Freeport should keep an eye on the pace of development of electric vehicles and renewable energy. Accelerated deployment is likely to be bullish for the price of copper, and that would be good news for Freeport-McMoRan. The stock has plenty of upside potential