Weekly Update: Copper Miners Trade Sideways amid Uncertainty
Copper has been a relative underperformer in 2017 among the broader industrial metals space (XME). Copper’s slide continued last week, with the metal testing the psychologically crucial price level of $5,500 per metric ton on the LME (London Metal Exchange). Though copper prices recouped some of their losses, they still closed marginally lower in the week.
The earnings of copper miners such as Freeport-McMoRan (FCX), Southern Copper (SCCO), Glencore (GLNCY), and Teck Resources (TECK) are sensitive to copper prices. Miners’ price actions tend to be affected by movements in copper prices.
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Miners’ price actions
The sideways movement in copper prices was reflected in miners’ price actions last week as most copper miners traded sideways. Copper market sentiments turned somber after the initial euphoria over President Donald Trump’s proposed infrastructure investments withered away.
Also, supply-side disruptions, which some market observers see as bullish, failed to provide much support to copper prices. We’ve seen an increase in copper inventories over the last few weeks, showing that even with supply-side disruptions, there’s still plenty of copper to go around.
In this series, we’ll look at the key events in the copper mining space last week. We’ll consider copper’s outlook after its recent weakness, and we’ll also take a look at some company-specific news.
Let’s begin by analyzing the different factors that could impact copper in the near term.