After Freeport-McMoRan’s October Two-Month High, What Next?



Two-month high

On October 7, 2015, Freeport-McMoRan (FCX) closed at $13.01—the highest closing level since July 23. Fiscal 2015 has been nothing short of a roller coaster ride for Freeport investors. The entire metals and mining space (XME) has seen heightened volatility over the last six or so months. However, companies like Freeport and Glencore (GLNCY) have been more volatile than some of their peers in this sector.

Over the last few trading sessions, both Freeport and Glencore rose smartly on the stock exchanges. While part of these upticks can be attributed to positive macro developments in the copper industry, company-specific reasons also played a part in this rally.

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Stocks rally

The graph above shows the early October movement in Freeport’s stock. Freeport rose by ~46% since September 28, when it closed at $8.91. Nonetheless, the stock was still down 45% since the beginning of the year. Turquoise Hill Resources (TRQ) has been among the best performing copper companies this year. As of October 7, its stock has fallen by ~11% in 2015.

Teck Resources (TCK) has seen its share price dwindle more than 55% this year. Teck Resources is the world’s second-largest exporter of steelmaking coal. It’s also North America’s largest coal producer, with the annual capacity to produce 28 Mt (million tonnes). Along with falling copper prices, Teck Resources has been hit by the lower Chinese coal demand. However, Teck Resources’ share price jumped more than 50% over the week before October 7.

Series overview

In this series, we’ll explore the factors driving Freeport’s stock. One of the factors driving copper companies, for example, has been the uptrend in copper prices. We’ll discuss this in detail in the next part of the series.


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