Turquoise Hill Resources Ltd

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.

According to Freeport-McMoRan’s agreement with Indonesia’s government, it must divest an additional 20.6% stake in its Indonesian operations to the government or its citizens.

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

It’s important for investors in companies such as Freeport-McMoRan, BHP Billiton, and Rio Tinto to track Chinese copper demand indicators.

Rio Tinto reported its 1H16 results on August 3, 2016. Its underlying earnings came in at $1.6 billion, 7% ahead of consensus expectations of $1.5 billion.

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

Freeport’s average realized copper prices fell 14% in 2Q15 on a year-over-year basis. Lower commodity prices took a toll on Freeport’s 2Q15 profits.

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 April 23, Freeport said it might look at selling a minority stake in its energy business and come out with an IPO of its oil and gas subsidiary later in the year.

A declining on-warrant copper inventory means that more metal is being booked for delivery. This is generally associated with stronger demand.