Southern Copper Corp

Freeport-McMoRan (FCX) is expected to release its 2Q16 earnings on July 26. In this series, we’ll explore what Wall Street analysts expect from FCX’s 2Q16 earnings.

Glencore (GLEN-L) has the highest percentage of “buy” or higher recommendations in our select group of mining stocks.

In this series, we’ll discuss recent copper industry indicators. We’ll see how copper prices have done in 2015. We’ll also discuss copper supply trends and demand.

Of the 19 analysts covering BHP Billiton (BHP), four analysts issued “buy” recommendations, while 12 issued “holds,” and three issued “sells.”

Freeport-McMoRan released its 3Q17 earnings on October 25, posting revenues of ~$4.3 billion in 3Q17, compared with ~$3.7 billion in 2Q17.

Southern Copper has historically traded at a premium to Freeport.

Previously in this series, we’ve looked at China’s July steel and aluminum exports. In this final part of the series, we’ll look at Chinese copper imports.

As copper market conditions have improved, companies have also taken another look at their capital allocation strategies.

The repercussions of the equity market carnage are evident in commodity markets. Copper, which some analysts see as an indicator of the global economy’s health, has come off its 2018 highs.

Copper bulls had a nice run since July. Copper underperformed several industrial metals in 1H17. However, copper has been on an uptrend in 2H17.

Last week was broadly positive for industrial metals (DBC). Copper rose 3.6%, while aluminum prices rose 1.3% in the week ending November 24.

In this series, we’ll look at the key developments that impacted mining companies last week. We’ll also look at some of the company-specific developments that impacted mining stocks.

Investments in renewable energy bode well for global copper demand, as the copper intensity in renewable energy is higher than in non-renewable energy.

China imported 390,000 metric tons of unwrought copper and copper products in August 2017—compared to 350,000 metric tons in August 2016.

BHP Billiton’s (BHP) copper production fell 16.0% in fiscal 2017 to 1.3 million tons.

Copper prices have shown strength over the last few trading sessions, which has helped the upwards price action of miners including Freeport-McMoRan (FCX), Glencore (GLNCY), and Southern Copper (SCCO).

As we saw in the previous two parts of this series, Vale’s (VALE) iron ore and coal production increased sequentially in 2Q17.

During its 2Q17 earnings call, Freeport-McMoRan (FCX) lowered its 2017 copper production guidance to 3.7 billion pounds.

While trading activities account for more than 70% of Glencore’s consolidated revenues, most of its earnings come from the industrial business.

Freeport expects its copper shipments to fall next year due to asset sales. The falling trend in its copper shipments could continue beyond 2017.

Freeport-McMoRan (FCX) has been trading largely sideways around the $12 price level for almost a month. August has been a dull month for most companies in the metals and mining space.

Zinc has gained more than 15% in 2016 so far, outperforming other base metals in the same category.

Since China (PGJ) is the largest copper consumer, it’s important for investors to keep track of Chinese copper demand indicators.

Although copper prices have recovered from sub-$5,000 levels, the worst doesn’t seem to be over for copper or Freeport-McMoRan (FCX).

According to the World Bureau of Metal Statistics, Peru’s refined copper production declined in the first three months of the current year.

Over the last decade, China (FXI) has been the key driver of global commodity trade. This holds true for industrial metals like copper, iron ore, and aluminum.

On a year-over-year basis, Chilean refined copper production fell by more than 1%. Incessant rains causing flooding are behind the decline in February’s copper production.

Copper prices have traded largely sideways in April. Copper prices fell sharply in January but have recovered smartly since then. Year-to-date, copper prices are down ~4%.

In 2014, its zinc operations contributed 31% to revenues and made up 27% of gross profit before depreciation and amortization.

The trend in copper prices has been clearly uneven this year. Higher copper prices benefit copper producers like Freeport-McMoRan.

Copper is also known as “Dr. Copper,” as analysts see the metal’s prices as a reflection of the global economy’s health.

Freeport has lost almost 20% of its market capitalization so far this year, making 2015 a turbulent period for the company.

Freeport’s global mining portfolio shows that Freeport has major operations in North America, South America, Africa, and Indonesia.

Freeport-McMoRan (FCX) is a leading natural resources company. It’s among the top copper producers and holds the position of largest molybdenum producer.

China overtook the US and Japan as the premier manufacturing location. China doesn’t have sufficient copper reserves, leading to the global copper trade.

Cathodes are not used directly by copper consumers. Cathodes are melted and cast into shapes based on end usage, such as cakes, ingots, rods, and billets.

Copper mining is concentrated in Latin America, while the major copper consumers are in Asia. More than 60% of global copper consumption comes from Asia.

Mining giants Rio Tinto and BHP Billiton have diversified portfolios of iron ore, aluminum, and copper assets, with most revenues coming from iron ore.