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Why Analysts Have a Love-Hate Relationship with Copper Miners

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Metals prices

Metals have had a tough ride so far in 2018. After rallying for the last two years, base metals—especially copper—have witnessed selling pressures this year.

Copper has now fallen to a nine-month low. Interestingly, in December 2017, we saw a sharp rally in copper prices as investors priced in synchronized global growth for 2018. To add to that, a flurry of labor negotiations that were scheduled for 2018 made traders even more bullish on copper.

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Copper prices have fallen

Copper prices are now hovering near $6,500 per metric ton on the London Metal Exchange. As copper has fallen, copper miners have followed suit. Freeport-McMoRan (FCX) and Glencore (GLNCY) have fallen 10.2% and 16.4%, respectively, so far this year based on their July 5 closing prices.

In Freeport’s case, concerns over its Grasberg operations, where Rio Tinto (RIO) is its minority partner, have been playing heavily on investors’ minds. Glencore fell sharply earlier this week after it was issued a subpoena by the US Department of Justice. Southern Copper (SCCO) and Teck Resources (TECK) have seen negative price action of 3.1% and 5.1%, respectively, so far in the year.

Series overview

In this series, we’ll see how analysts are rating the leading copper mining companies. We’ll also see how analysts have changed their ratings on copper miners. Let’s begin by analyzing the recent movements in copper prices.

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