How Did the Copper Industry Fare in 3Q15?



The 3Q15 earnings season

The earnings season for 3Q15 is nearly over. Most copper companies have reported their earnings for the quarter. In this series, we’ll explore some of the key highlights of major copper companies’ 3Q15 earnings. We’ll also look at what various copper companies said on the industry outlook during their respective 3Q15 earnings calls.

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Lackluster year

It’s been a lackluster year for companies operating in the commodities space (COMT). Copper prices dipped to six-and-a-half-year lows in 3Q15. Prices did recover somewhat during the end of September but again resumed their downslide in November, hitting fresh six-and-a-half-year lows.

In the above graph, you can see the recent movement in copper producers’ stock. It’s important to note that 2015 has been nothing short of a nightmare for the copper industry. Freeport-McMoRan (FCX), Teck Resources (TCK), and Glencore (GLNCY) are trading near multi-year lows.

Stocks have fallen

FCX, TCK, and GLNCY have shed more than two-thirds of their respective market capitalization this year. Along with falling commodity prices, these companies are battling a surging debt pile. The deadly duo of lower commodity prices and higher leverage is weighing heavily on these companies’ share prices.

However, Southern Copper (SCCO) and Turquoise Hill Resources (TRQ) have been relatively better off. SCCO and TRQ have respectively lost 9.1% and 15.1%, respectively, so far in 2015.

The Chinese slowdown has spelled doom for copper companies. Copper producers have announced production cutbacks to survive in the current low price environment. In the next part, we’ll explore copper companies’ 3Q15 shipments and future production plans.


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