Freeport-McMoRan (FCX), the leading US-based copper miner, has been struggling in 2018. The stock has fallen 44% year-to-date based on its closing prices on December 18. Other copper miners have followed copper lower. Diversified miners including BHP Billiton (BHP), Rio Tinto (RIO), and Vale (VALE) have also come under pressure. There have been more concerns about the Chinese economy.
Some of the recent data points from China including car sales, retail sales, and industrial production have shown growth moderation. Car sales have fallen by double digits for three consecutive months. China’s November trade war was also weaker than expected. The country’s export and import growth rates fell to multi-month lows. While a weaker domestic economy led to lower imports, front-loading of exports was blamed for China’s lower exports.
However, China’s copper imports were strong in November. Although China’s imports have fallen on a yearly basis, the fall came from a relatively higher base. Read Chinese Copper Imports Fell: Not a Reason to Panic Yet to find out what China’s November copper imports signify for copper miners.
Coming back to Freeport-McMoRan, are we done with the sell-off or is there more pain ahead for the stock? In this series, we’ll discuss Freeport-McMoRan’s outlook. First, we’ll discuss the biggest risk facing metal and mining companies (DIA).