| Could OPEC’s Meeting Negatively Impact Freeport-McMoRan? | |
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Key Events Freeport-McMoRan Investors Should Watch (Continued from Prior Part) OPEC’s meeting
It could be a familiar sign for Freeport-McMoRan (FCX) investors when OPEC (Organization of the Petroleum Exporting Countries) meets on December 4. Last year, at its annual meeting, OPEC decided to maintain its daily crude output. The decision had a negative impact on all of the commodities (DBC). Among the copper producers, Freeport-McMoRan’s stock fell 8.5% after OPEC’s meeting. Teck Resources (TCK) wasn’t far behind. It lost 7.7% of its market capitalization. However, Southern Copper (SCCO) only lost about 3.5% after OPEC’s meeting.
Volatility
There are two broad reasons why Freeport-McMoRan and Teck Resources fell sharply after OPEC’s meeting last year. First, both of these companies have higher financial leverage. This makes them more volatile. The second reason why Freeport-McMoRan and Teck Resources fell more than Southern Copper can be found in their energy exposure. While Southern Copper is a pure-play copper producer, Freeport-McMoRan and Teck Resources have substantial energy exposure. Turquoise Hill Resources (TRQ) is another pure-play copper producer.
Energy exposure
Teck Resources is the world’s second-largest exporter of steelmaking coal. It’s also North America’s largest producer. It has the annual capacity to produce 28 million tonnes. Freeport-McMoRan diversified into energy exploration a couple of years ago. Crude oil prices fell for more than a year, as you can see in the above graph. If crude oil prices fall again after OPEC’s meeting, it could have a negative impact on Freeport-McMoRan. While Freeport-McMoRan is looking at “strategic alternatives” for its energy business, it’s still exposed to the movement in energy prices.
Meanwhile, can OPEC’s meeting have an impact on copper prices? We’ll explore this in the next part of the series.
Continue to Next Part Browse this series on Market Realist:
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Freeport McMoRan Copper and Gold Inc.
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PRODUCER |
CODE : FCX |
ISIN : US35671D8570 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Freeport McMoran is a gold and copper producing company based in United states of america. Freeport McMoran produces gold, copper, cobalt, molybdenum and silver in Chile, in Congo Dem. Rep. of, in Indonesia and in Peru, develops copper in Peru, and holds various exploration projects in Chile. Its main assets in production are CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI and MORENCI - ROM LEACH in Chile, GRASBERG, SIERRITA and BAGDAD in Indonesia, TENKE FUNGURUME and TYRONE in Congo Dem. Rep. of and CERRO VERDE in Peru, its main asset in development is SAFFORD in Peru and its main exploration properties are BAGDAD - ROM LEACH and CHINO - ROM LEACH in Peru and CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH and CLIMAX in Chile. Freeport McMoran is listed in Germany and in United States of America. Its market capitalisation is US$ 73.1 billions as of today (€ 68.3 billions). Its stock quote reached its lowest recent point on March 06, 2020 at US$ 10.00, and its highest recent level on April 26, 2024 at US$ 50.50. Freeport McMoran has 1 448 000 000 shares outstanding. |