| Freeport-McMoRan Looks to Control Costs amid Copper Price Slump | |
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Why Is Copper Falling to New 2015 Lows? (Continued from Prior Part) Costs
Commodity producers including BHP Billiton (BHP) don’t have much control over commodity (DBC) prices. When commodity prices start falling, high-cost producers become unprofitable much sooner than their peers that are placed better on the cost curve. Low-cost producers are able to tide over economic cycles better. It becomes prudent for commodity producers to control their unit production costs. Copper companies have been working to reduce their unit production costs to survive the current slump in copper prices.
Freeport-McMoRan
Freeport-McMoRan’s (FCX) unit copper cash costs after by-product credits were $1.52 per pound in 3Q15. Freeport-McMoRan expects its unit cash costs to fall to $1.15 per pound in 2016. Richard Adkerson, the company’s CEO, said during the company’s 3Q15 earnings call, “We’ve deferred projects. We reduced our workforce in connection with this cutback. We’re aggressively managing capital, operating and administrating costs. And we’re keeping our finger on the market, and in each of our operations, and we’re prepared to do whatever it takes, whatever it takes, to keep our operations generating positive cash flows to protect our liquidity, hold onto these assets for a better day.”
Lower crude prices
Codelco—the world’s largest copper producer—is also looking to control costs rather than cut production to survive in the current low price environment. As we discussed previously in this series, a stronger US dollar has helped producers outside the United States bring down their unit production costs. Lower energy prices have also helped copper producers lower their unit production costs. Diesel can make up almost 20% of copper’s production costs. Diesel prices have fallen as crude oil prices have corrected steeply.
Lower diesel costs have helped other copper producers, including Teck Resources (TCK) and Southern Copper (SCCO), lower their unit production costs. Also, curtailments of high-cost mines would help miners improve their cost positioning.
However, if miners increase production from their low-cost mines to compensate for the loss in production from the curtailment of their high-cost mines, the desired supply balance wouldn’t return to the market.
You can visit Market Realist’s Copper page for the other recent developments in this industry.
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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 72,6 milliards US$ (68,1 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2020 à 10,00 US$, et son plus haut niveau récent le 18 avril 2024 à 50,16 US$. Freeport McMoran possède 1 448 000 000 actions en circulation. |