| Copper 2016 Outlook: Could Supply Cuts Balance Demand Slowdown? | |
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An Investor’s Guide to Freeport-McMoRan’s 2016 Outlook (Continued from Prior Part) Copper 2016 outlook
Copper prices fell by more than a quarter in 2015. Copper has been on a downtrend after hitting $10,000 per metric ton in the beginning of 2011. LME (London Metals Exchange) copper prices have fallen in every year since 2011. Only in 2012 did they managed to hold steady, closing roughly flat as compared to the previous year.
So, could the downtrend in copper prices continue in 2016? In this part of the series, we’ll look at copper’s 2016 outlook. We’ll see the key factors that could drive copper in 2016.
Supply cuts versus demand slowdown
Copper’s 2016 outlook could depend on the prevailing demand and supply situation. On the demand side, all eyes should be on China, which accounts for ~45% of global copper consumption. China’s metal appetite has been driving global miners such as BHP Billiton (BHP) and Rio Tinto (RIO) for more than a decade.
On the supply side, markets should be looking at the impact of supply cuts announced by copper producers including Glencore (GLNCY) and Freeport-McMoRan (FCX). In the coming parts of this series, we’ll explore more on how the demand-supply equation could shape up in 2016.
Global sentiments
Global sentiments should also impact copper prices. Copper’s 2016 outlook could depend on the global economic activity. We might see a spillover from geopolitical tensions onto risk assets. As investors flee risk assets in their flight for security, asset classes such as commodities could see downward price action.
Also, the currency war initiated by China at the beginning of 2016 could lead to a stronger US dollar (UUP). Copper, like most other commodities, has a negative correlation with the greenback. The graph above shows movement in LME copper prices versus the dollar. A further rise in the dollar could lead to more weakness in copper prices.
In the next part, we’ll look at the outlook for China’s copper demand.
Continue to Next Part 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 71,8 milliards US$ (67,5 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2020 à 10,00 US$, et son plus haut niveau récent le 19 avril 2024 à 49,61 US$. Freeport McMoran possède 1 448 000 000 actions en circulation. |