| Why China’s Slowdown Could Continue to Haunt Freeport in 2016 | |
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An Investor’s Guide to Freeport-McMoRan’s 2016 Outlook (Continued from Prior Part) China’s slowdown
In Part 2 of this series, we saw that China’s December manufacturing PMI (purchasing managers’ index) missed analyst expectations. Copper producers Freeport-McMoRan (FCX), Teck Resources (TCK), Southern Copper (SCCO), and Turquoise Hill Resources (TRQ) fell as China’s slowdown pushed copper prices to multiyear lows in 2015. In this part of the series, we’ll explore how the Chinese economy could play out in 2016.
Could 2016 be any better?
In 2015, the Chinese economy was expected to have grown at the slowest pace in almost 25 years. The economic growth outlook for 2016 looks no better and economic activity is set to cool off further. Although some of the Chinese economic indicators did improve in the second half of 2015, they were largely ignored by the markets.
China’s (FXI) real estate indicators started to improve in the middle of 2015. China’s building sales rose on a year-over-year basis in each month between April–November 2015. However, in the first 11 months of fiscal 2015, Chinese real estate development enterprises purchased 33.1% less land for future construction as compared to the corresponding period in the previous year. Also, the floor area under construction has been falling steadily, as shown in the graph above.
Lower construction activity
It’s important to note that copper demand depends on the actual construction activity rather than the building sales. The higher building sales are likely coming from the huge inventory buildup with the Chinese real estate enterprises. Chinese construction activity needs to improve to support the copper demand in that country.
In the next part, we’ll explore why China’s copper demand could deteriorate further in 2016.
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 69,5 milliards US$ (65,2 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2020 à 10,00 US$, et son plus haut niveau récent le 23 avril 2024 à 47,99 US$. Freeport McMoran possède 1 448 000 000 actions en circulation. |