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Key Indicators Freeport Investors Should Track (Part 9 of 17) (Continued from Part 8) China’s manufacturing PMI
Previously, we have analyzed the trends in China’s real estate and automobile industry. Now we will look at its manufacturing PMI, or purchasing managers’ index, which is a key indicator of economic activity. The manufacturing PMI is released on a monthly basis and is based on the diffusion indices of five components:
- New orders: 30%
- Inventory levels: 10%
- Output: 25%
- Supplier delivery times: 15%
- Employment environment: 20%
Analysts track PMI figures closely, as it can give crucial insights into future GDP levels. Readings above 50 generally indicate economic expansion, while a reading below 50 indicates a contraction.
PMI below 50
The above chart shows the trends in China’s official PMI. As you can see, its PMI has been below 50 for two consecutive months, which reflects a slowdown in the Chinese economy. The demand for all industrial commodities would be impacted as a result of this slowdown.
Interestingly, while the official Chinese PMI in February is below 50, the PMI data released by HSBC and Markit show that the PMI was above 50 in February. However, the flash HSBC PMI has fallen to an 11-month low of 49.2 in March. Analysts were expecting the PMI to be more than 50 in March.
Negative for copper
A PMI below 50 indicates weakness in China’s industrial sector, which is negative for the global copper industry and reflects a weakness in Chinese copper demand. A lower copper demand in China will negatively impact copper producers like Freeport-McMoRan (FCX), Teck Resources (TCK), Glencore Plc. (GLNCY), and Stillwater Mining (SWC). FCX currently forms 3.1% of the Materials Select Sector SPDR ETF (XLB).
So far, we have analyzed how copper demand is shaping up in China. In the next part, we will look at the supply side dynamics of the Chinese copper industry.
Continue to Part 10 Browse this series on Market Realist:
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Freeport McMoRan Copper and Gold Inc.
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PRODUCTEUR |
CODE : FCX |
ISIN : US35671D8570 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Freeport McMoran est une société de production minière d'or et de cuivre basée aux Etats-Unis D'Amerique. Freeport McMoran est productrice d'or, de cuivre, d'argent, de cobalt et de molybdène au Chili, au Perou, en Indonesie et en Republique Democratique Du Congo, en développement de projets de cuivre au Perou, et détient divers projets d'exploration au Chili. Ses principaux projets en production sont CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI et MORENCI - ROM LEACH au Chili, GRASBERG, SIERRITA et BAGDAD en Indonesie, TENKE FUNGURUME et TYRONE en Republique Democratique Du Congo et CERRO VERDE au Perou, son principal projet en développement est SAFFORD au Perou et ses principaux projets en exploration sont BAGDAD - ROM LEACH et CHINO - ROM LEACH au Perou et CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH et CLIMAX au Chili. Freeport McMoran est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 71,5 milliards US$ (66,8 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2020 à 10,00 US$, et son plus haut niveau récent le 25 avril 2024 à 49,40 US$. Freeport McMoran possède 1 448 000 000 actions en circulation. |