Freeport-McMoRan (FCX), the leading US copper miner, closed at $18.1 on December 22. Based on that day’s closing prices, Freeport has gained 30.0% in December. Thanks to the upward price action this month, the stock is now trading with year-to-date gains of 37.2%.
Freeport’s 2017 price action is now more or less in line with other copper miners as well as copper prices. For instance, Southern Copper (SCCO) and Antofagasta (ANTO) have respectively gained 44.7% and 42.8% in 2017, based on December 22 closing prices. Glencore (GLEN-L) and First Quantum Minerals (FM) have seen upward price action of 36.3% and 28.2%, respectively, in 2017.
Having said that, prior to December, Freeport was having a somber 2017. While the year started off well for Freeport and the stock continued its positive momentum from the last year, it saw selling pressure on concerns over its Grasberg mine in Indonesia. Notably, the company was barred from exporting copper concentrates from Indonesia for most of 1Q17. Freeport underperformed the copper mining space in 2017 and the stock didn’t track copper, which is the key commodity it sells, for most of the year.
In this series, we’ll see what factors are supporting Freeport this month. We’ll look at some of the macro as well as company-specific factors that have supported Freeport’s price action in December. We’ll also look at Freeport’s valuation multiples as we head into 2018.