In a preview of what gold miners in the future will face, Newmont this time around was able to generate a healthy earnings gain because rising gold prices were able to overcome increased costs, resulting in earnings easily beating analysts' estimates.
Newmont of course has a strong copper exposure, so is more than just a gold miner. Even so, its earnings were generated by rising price of gold more than anything, although copper has been no slouch in that regard either.
First-quarter earnings, adjusted for some items, were $513 million, or $1.04 a share, compared with $408 million, or 83 cents a share, last year in the same quarter.
Sales jumped 10 percent to $2.5 billion, according to Newmont, which operates mines in North and South America, Africa, Australia and Indonesia.
Analysts on average were looking for adjusted earnings of 99 cents a share and revenue of $2.4 billion.
Production targets for the full year 2011 of 5.1 million to 5.3 million ounces of gold and 190 million to 220 million pounds of copper were kept in place by Newmont.
The Newmont board also approved a second-quarter dividend of 20 cents a share linked to the gold price, based on the net average realized price of $1,382 an ounce in the first quarter.
"The price link dividend is one that provides some certainty and flexibility in that upward pricing environment and there is an opportunity to share more with investors over time through that, should we choose to do so," said Chief Executive Officer Richard O'Brien.
Newmont Mining closed Thursday at $59.23, gaining $0.38, or 0.65 percent.
Showing posts with label Copper Prices. Show all posts
Showing posts with label Copper Prices. Show all posts
Monday, April 25, 2011
Wednesday, April 20, 2011
Freeport-McMoRan (FCX) Driven Up By Metals
Freeport-McMoRan Copper and Gold (NYSE:FCX) had a blowout quarter led by higher copper prices and production, along with better-than-expected sales of molybdenum.
The surge in gold prices hasn't hurt the diversified miner either.
Freeport generated a profit of $1.5 billion, or $1.57 a share, up from $945 million, or $1 a share, last year in the same quarter, adjusted for the stock split. Revenue jumped 31% to $5.71 billion. Analysts polled by Thomson Reuters had estimated a $1.26profit on $5.3 billion in revenue.
Copper production grew 2.3% while gold production rose 3.8%. Molybdenum output increased about 18 percent.
It sold 926 million pounds of copper, more than the 840 million pounds it had projected.
Prices for gold and copper both rose 26 percent, while molybdenum prices increased 20percent. It also sold 20 million pounds of molybdenum, surpassing the 17 million pounds projected.
Freeport has also been successfully reducing it debt load, which had reached about $17.5 billion after the acquisition of Phelps Dodge. It has been cut to $3.7 billion.
Freeport was trading at $53.82, gaining $2.10, or 4.06 percent, as of 11:52 AM EDT.
The surge in gold prices hasn't hurt the diversified miner either.
Freeport generated a profit of $1.5 billion, or $1.57 a share, up from $945 million, or $1 a share, last year in the same quarter, adjusted for the stock split. Revenue jumped 31% to $5.71 billion. Analysts polled by Thomson Reuters had estimated a $1.26profit on $5.3 billion in revenue.
Copper production grew 2.3% while gold production rose 3.8%. Molybdenum output increased about 18 percent.
It sold 926 million pounds of copper, more than the 840 million pounds it had projected.
Prices for gold and copper both rose 26 percent, while molybdenum prices increased 20percent. It also sold 20 million pounds of molybdenum, surpassing the 17 million pounds projected.
Freeport has also been successfully reducing it debt load, which had reached about $17.5 billion after the acquisition of Phelps Dodge. It has been cut to $3.7 billion.
Freeport was trading at $53.82, gaining $2.10, or 4.06 percent, as of 11:52 AM EDT.
Tuesday, April 19, 2011
Diversified Miners (RIO) (TCK) (VALE) (BHP) Close Down as Base Metals Drop
Base metals dropped in Monday trading putting pressure on diversified mining giants Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP), Vale SA (NYSE:VALE) and Teck Resources, (NYSE:TCK), which all closed down.
Three-month copper on the London Metal Exchange dropped to $9,207 a ton, its lowest since March 17. It closed at $9,225 a ton from Friday's close at $9,450.
Stocks of copper in LME warehouses last rose 1,350 tons to 451,775 tons, their highest since June 2010.
Also weighing on metals, the U.S. dollar was stronger against a basket of major currencies, weakening metals demand from non-U.S. investors. European equities were down on increased talk that Greece will be forced to restructure its debt and uncertainty over a bailout for Portugal which dampened risk appetite.
Aluminium closed $2,674 from $2,690 a ton.
Zinc ended at $2,325 from $2,398 a ton. Stocks of the metal rose 50 tons to a seven-year high of 764,300 tons.
Battery material lead was down close to five percent to its lowest in over a month at $2,520 a ton. It closed at $2,528 from $2,651 a ton, while tin finished at $32,350 from $33,100 a ton and nickel ended at $25,500 a ton from $26,155.
Platinum was lower by 0.2 percent at $1,779.99 an ounce, while palladium fell 3.3 percent to $735.22.
BHP closed Monday at $97.98, falling $1.82, or 1.82 percent. Rio Tinto closed at $69.09, down $1.82, or 2.57 percent. Teck Resources ended the session at $50.68, losing $1.26, or 2.43 percent. Vale closed at $32.05, dropping $0.73, or 2.23 percent.
Three-month copper on the London Metal Exchange dropped to $9,207 a ton, its lowest since March 17. It closed at $9,225 a ton from Friday's close at $9,450.
Stocks of copper in LME warehouses last rose 1,350 tons to 451,775 tons, their highest since June 2010.
Also weighing on metals, the U.S. dollar was stronger against a basket of major currencies, weakening metals demand from non-U.S. investors. European equities were down on increased talk that Greece will be forced to restructure its debt and uncertainty over a bailout for Portugal which dampened risk appetite.
Aluminium closed $2,674 from $2,690 a ton.
Zinc ended at $2,325 from $2,398 a ton. Stocks of the metal rose 50 tons to a seven-year high of 764,300 tons.
Battery material lead was down close to five percent to its lowest in over a month at $2,520 a ton. It closed at $2,528 from $2,651 a ton, while tin finished at $32,350 from $33,100 a ton and nickel ended at $25,500 a ton from $26,155.
Platinum was lower by 0.2 percent at $1,779.99 an ounce, while palladium fell 3.3 percent to $735.22.
BHP closed Monday at $97.98, falling $1.82, or 1.82 percent. Rio Tinto closed at $69.09, down $1.82, or 2.57 percent. Teck Resources ended the session at $50.68, losing $1.26, or 2.43 percent. Vale closed at $32.05, dropping $0.73, or 2.23 percent.
Wednesday, March 30, 2011
Alcoa (AA) (BHP) (RIO) (ACH) to Gain from High Copper Prices
Companies with significant exposure to aluminum, like Alcoa (NYSE:AA), Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP) and Chalco (NYSE:ACH) and Rusal, should enjoy support as producers look for alternatives for certain products which can substitute aluminum for copper.
Aluminum is in general accepted as a cheaper substitute to copper in many applications, and many manufacturers are seriously considering switching to aluminum with copper reaching all-time high prices early this year.
Alcoa's products are used in a wide variety of products from aircrafts and automobiles to commercial transportation and packaging. The company also sells non-aluminum products like aerospace and industrial fasteners.
Copper is primarily used in electrical appliances and construction. About 65 percent of copper usage is attributable to electrical appliances because it is an excellent conductor of electricity. Construction applications make up the bulk of the remaining share of copper usage in which the metal is often used for roofing and plumbing as well as in automobile and ship manufacturing.
Copper prices are currently at an all-time high, above $4.5 a pound. In comparison, aluminum is priced at about $1.1 a pound. Given the costs of retooling manufacturing processes and the extra aluminum it takes to conduct the same amount of electricity as copper, it often becomes more economical to use aluminum instead of copper if copper prices rise above $3.50 a pound.
Alcoa closed Tuesday at $17.49, gaining $0.25, or 1.45 percent.
Source
Aluminum is in general accepted as a cheaper substitute to copper in many applications, and many manufacturers are seriously considering switching to aluminum with copper reaching all-time high prices early this year.
Alcoa's products are used in a wide variety of products from aircrafts and automobiles to commercial transportation and packaging. The company also sells non-aluminum products like aerospace and industrial fasteners.
Copper is primarily used in electrical appliances and construction. About 65 percent of copper usage is attributable to electrical appliances because it is an excellent conductor of electricity. Construction applications make up the bulk of the remaining share of copper usage in which the metal is often used for roofing and plumbing as well as in automobile and ship manufacturing.
Copper prices are currently at an all-time high, above $4.5 a pound. In comparison, aluminum is priced at about $1.1 a pound. Given the costs of retooling manufacturing processes and the extra aluminum it takes to conduct the same amount of electricity as copper, it often becomes more economical to use aluminum instead of copper if copper prices rise above $3.50 a pound.
Alcoa closed Tuesday at $17.49, gaining $0.25, or 1.45 percent.
Source
Wednesday, March 23, 2011
Ivanhoe (IVN) CEO Likes Copper, Iron Ore
With the eventual start of the reconstruction in Japan, Ivanhoe Mines (NYSE:IVN) Chief Executive Officer Robert Friedland said he's bullish on iron ore and copper prices in the near future.
"What happened in Japan is insanely bullish for copper," Friedland said at the Mines and Money conference in Hong Kong.
"I'm a copper bull, not really a gold bull," he added.
With damage to infrastructure and buildings estimated as high as $308 billion, it'll take years for Japan to rebuild, and it's sure to be a boon to the two commodities when combined with ongoing demand from China, and to a lesser extent, India.
More than likely it'll also extend the ongoing bull market beyond the years it was expected to last. It's anyone's guess now as to the length of time some raw materials will continue to rise in price.
Ivanhoe closed Tuesday at $26.36, gaining $0.28, or 1.07 percent.
"What happened in Japan is insanely bullish for copper," Friedland said at the Mines and Money conference in Hong Kong.
"I'm a copper bull, not really a gold bull," he added.
With damage to infrastructure and buildings estimated as high as $308 billion, it'll take years for Japan to rebuild, and it's sure to be a boon to the two commodities when combined with ongoing demand from China, and to a lesser extent, India.
More than likely it'll also extend the ongoing bull market beyond the years it was expected to last. It's anyone's guess now as to the length of time some raw materials will continue to rise in price.
Ivanhoe closed Tuesday at $26.36, gaining $0.28, or 1.07 percent.
Monday, February 14, 2011
Cliffs Natural Resources (NYSE:CLF) Jumps on China Copper Imports
Cliffs Natural Resources (NYSE:CLF) is a big gainer so far today on the news China imports of copper have risen.
Other copper producers like Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) also got a nice bump from the apparent boost in copper demand.
The March copper contract on the New York Mercantile Exchange, while off session highs, still soared six cents to $4.60. Since January 2010, copper prices have surged by almost 40 percent.
Copper prices had hit a record of $4.62 earlier in trading.
Cliffs was trading at $91.99, gaining $4.48, or 5.12 percent, as of 12:36 PM EST. Freeport-McMorRan was trading at $56.00, up $2.48, or 4.63 percent.
Other copper producers like Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) also got a nice bump from the apparent boost in copper demand.
The March copper contract on the New York Mercantile Exchange, while off session highs, still soared six cents to $4.60. Since January 2010, copper prices have surged by almost 40 percent.
Copper prices had hit a record of $4.62 earlier in trading.
Cliffs was trading at $91.99, gaining $4.48, or 5.12 percent, as of 12:36 PM EST. Freeport-McMorRan was trading at $56.00, up $2.48, or 4.63 percent.
Wednesday, February 9, 2011
Goldman (NYSE:GS) Prefers Copper Among Base Metals
Saying they see most base metals as being close to fully priced, Goldman Sachs (NYSE:GS) noted copper is the one base metal they see continuing to rise in price.
Their assertion in both cases are the supply and demand equation at this time, which appears to have plenty of product for the market in the near term, with the exception of copper.
Talking the nickel rally they see it more of a price spike than anything else, citing the low supply and demand challenges it faced. They see it as a price spike, saying the rally happened too quickly in relationship to the shortage. “We continue to believe that further upside is unlikely beyond the very short-term, and medium-term risk is still heavily skewed to the downside,” Goldman concluded.
On copper prices Goldman said, “Although historical information on global producer, consumer, and trader inventories is imprecise, the data and estimates we do have suggests that there is still metal to be destocked as prices drive higher. We believe the highest historical breakout of prices and timespreads occurred when stocks moved down to around 9-10 days of consumption post-SRB sales in 2005/2006.”
They concluded, “We continue to recommend copper consumers aggressively protect price risk. We also recommend zinc consumers lock in longer-dated hedges when periods of high macro volatility persist and zinc prices sell off.”
Their assertion in both cases are the supply and demand equation at this time, which appears to have plenty of product for the market in the near term, with the exception of copper.
Talking the nickel rally they see it more of a price spike than anything else, citing the low supply and demand challenges it faced. They see it as a price spike, saying the rally happened too quickly in relationship to the shortage. “We continue to believe that further upside is unlikely beyond the very short-term, and medium-term risk is still heavily skewed to the downside,” Goldman concluded.
On copper prices Goldman said, “Although historical information on global producer, consumer, and trader inventories is imprecise, the data and estimates we do have suggests that there is still metal to be destocked as prices drive higher. We believe the highest historical breakout of prices and timespreads occurred when stocks moved down to around 9-10 days of consumption post-SRB sales in 2005/2006.”
They concluded, “We continue to recommend copper consumers aggressively protect price risk. We also recommend zinc consumers lock in longer-dated hedges when periods of high macro volatility persist and zinc prices sell off.”
Wednesday, January 5, 2011
Regal Beloit (NYSE:RBC) Margins Under Pressure with Rising Copper Prices
Rising copper prices has forced KeyBanc to re-evaluate their margin outlook for Regal Beloit (NYSE:RBC), which they believe will be under pressure in the first half of 2011.
KeyBanc said, "We are updating our model to include the acquisition of A.O. Smith's (NYSE:AOS) motor business and refreshing our early 2011 margin outlook following an extensive analysis of the near-term impact of copper inflation. Following an in-depth look at the earnings sensitivity surrounding the recent escalation in copper prices, we come away more cautious on the margin trajectory heading into 1H11 and believe these pressures are likely to create a temporary period of earnings volatility as price actions take time to catch up. We believe consensus expectations for 1H11 do not adequately reflect the full impact of these headwinds (we are modeling $0.20/share) and believe shares could come under pressure near-term following a healthy run in the stock."
KeyBanc reiterates a "Buy" rating on Regal Beloit, which was trading at $68.46, up $0.12, or 0.18 percent, as of 2:34 PM EST. They boosted their price target on them from $79 to $82.
KeyBanc said, "We are updating our model to include the acquisition of A.O. Smith's (NYSE:AOS) motor business and refreshing our early 2011 margin outlook following an extensive analysis of the near-term impact of copper inflation. Following an in-depth look at the earnings sensitivity surrounding the recent escalation in copper prices, we come away more cautious on the margin trajectory heading into 1H11 and believe these pressures are likely to create a temporary period of earnings volatility as price actions take time to catch up. We believe consensus expectations for 1H11 do not adequately reflect the full impact of these headwinds (we are modeling $0.20/share) and believe shares could come under pressure near-term following a healthy run in the stock."
KeyBanc reiterates a "Buy" rating on Regal Beloit, which was trading at $68.46, up $0.12, or 0.18 percent, as of 2:34 PM EST. They boosted their price target on them from $79 to $82.
Wednesday, December 22, 2010
Freeport (NYSE:FCX) Goldman's (NYSE:GS) Best Way to Play Gold, Copper
Goldman Sachs (NYSE:GS) raised their gold and copper price projections for 2011, and chose Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) as the best way to play the two.
For copper, Goldman raised their price projection for 2011 from $3.50 to $4.25 and for 2012 from $3.75 to $4.15.
For gold they raised their price projection for 2011 from $1,325 to $1,575 an ounce and for 2012 from $1,200 to $1,575 an ounce.
Also raised was their coal and zinc estimates, with coal increased to $229 for 2011 and $214 for 2012. Zinc was raised to $1.17 for 2011 and $1.10 for 2012.
Freeport-McMoRan Copper & Gold Inc. was trading at $116.35, up $0.15, or 0.13 percent, as of 11:45 AM EST.
For copper, Goldman raised their price projection for 2011 from $3.50 to $4.25 and for 2012 from $3.75 to $4.15.
For gold they raised their price projection for 2011 from $1,325 to $1,575 an ounce and for 2012 from $1,200 to $1,575 an ounce.
Also raised was their coal and zinc estimates, with coal increased to $229 for 2011 and $214 for 2012. Zinc was raised to $1.17 for 2011 and $1.10 for 2012.
Freeport-McMoRan Copper & Gold Inc. was trading at $116.35, up $0.15, or 0.13 percent, as of 11:45 AM EST.
Tuesday, November 30, 2010
Copper Demand to Exceed Supply Through 2013 Says GFMS
A report from the GFMS entitled Quarterly Three-Year Copper Forecast, says the supply of copper won't be able to keep up with demand through 2013.
The report concludes copper prices will rise as the copper market continues to be tight throughout that period, although an expected slowdown in the first half of 2011 could result in a temporarily copper surplus.
While production would be expected to meet that growing demand because of plans to increase output, secondary factors such as labor problems, low-quality grades, political effects and other operational risks associated with the industry in general will probably temper the production growth and not allow it to reach desired levels.
Over the next three years refined production is estimated to increase by about 3.4 percent annually through 2013.
The result of all of this in relationship to copper price should be a continual rise in price, which could easily reach above $11,000 a ton in 2013, according to the report.
Even though China may cut back on commodity imports in general and copper imports specifically, they will still account for just under 66 percent of the increase in global copper consumption annually during the time period we're talking about.
Add to this this the growing interest by investors in copper and commodities, and there is sure to be an increased flow of money into the metal.
Bottom line is it seems copper producers and investors are in for a volatile but profitable ride over the next three years.
The report concludes copper prices will rise as the copper market continues to be tight throughout that period, although an expected slowdown in the first half of 2011 could result in a temporarily copper surplus.
While production would be expected to meet that growing demand because of plans to increase output, secondary factors such as labor problems, low-quality grades, political effects and other operational risks associated with the industry in general will probably temper the production growth and not allow it to reach desired levels.
Over the next three years refined production is estimated to increase by about 3.4 percent annually through 2013.
The result of all of this in relationship to copper price should be a continual rise in price, which could easily reach above $11,000 a ton in 2013, according to the report.
Even though China may cut back on commodity imports in general and copper imports specifically, they will still account for just under 66 percent of the increase in global copper consumption annually during the time period we're talking about.
Add to this this the growing interest by investors in copper and commodities, and there is sure to be an increased flow of money into the metal.
Bottom line is it seems copper producers and investors are in for a volatile but profitable ride over the next three years.
Tuesday, November 23, 2010
Freeport (NYSE:FCX), BHP (NYSE:BHP), Teck (NYSE:TCK), Southern Copper(NYSE:SCCO) Plunge on Falling Copper Prices
Copper prices have plummeted today, dragging down heavily-exposed copper companies like Freeport-McMoran (NYSE:FCX), BHP Billiton (NYSE:BHP), Teck Resources (NYSE:TCK) and Southern Copper(NYSE:SCCO).
Much of this was precipitated by the weakening euro versus the U.S. dollar, as the dollar index rose early in the trading session.
There is also the continuing uncertainty as to the demand which will come from China, as it's certain it'll fall from previous estimates as China battles inflationary pressures. Copper demand will remain strong, but not as strong as expected, which will weaken results going forward.
Refined copper imports for China plunged by 30 percent to 169.897 metric tons in October, the lowest level in the last 12 months. Strong domestic supply and higher global prices were the reason behind that fall in demand.
An ongoing weak U.S. housing market is also dragging on the market, and all of these factors aren't going to change any time soon, other than the U.S. dollar, which will continue to be pushed down in value because of the misguided policies of Ben Bernanke and the Federal Reserve.
Freeport was trading at $98.42, falling $3.59, or 3.52 percent at 2:10 PM EST. Tech Resources was at $47.96, dropping by $2.09, or 4.18 percent. Southern Copper fell to $41.97, losing $2.32, or 5.24 percent. BHP Billiton was trading down to $83.27, declining by $3.31, or 3.82 percent.
Much of this was precipitated by the weakening euro versus the U.S. dollar, as the dollar index rose early in the trading session.
There is also the continuing uncertainty as to the demand which will come from China, as it's certain it'll fall from previous estimates as China battles inflationary pressures. Copper demand will remain strong, but not as strong as expected, which will weaken results going forward.
Refined copper imports for China plunged by 30 percent to 169.897 metric tons in October, the lowest level in the last 12 months. Strong domestic supply and higher global prices were the reason behind that fall in demand.
An ongoing weak U.S. housing market is also dragging on the market, and all of these factors aren't going to change any time soon, other than the U.S. dollar, which will continue to be pushed down in value because of the misguided policies of Ben Bernanke and the Federal Reserve.
Freeport was trading at $98.42, falling $3.59, or 3.52 percent at 2:10 PM EST. Tech Resources was at $47.96, dropping by $2.09, or 4.18 percent. Southern Copper fell to $41.97, losing $2.32, or 5.24 percent. BHP Billiton was trading down to $83.27, declining by $3.31, or 3.82 percent.
Monday, November 15, 2010
Endeavour (AMEX:EXK), Silver Standard (NASDAQ:SSRI), Mag Silver (AMEX:MVG) All Down on China Inflation Concerns
Endeavour Silver (AMEX:EXK), Silver Standard Resources (NASDAQ:SSRI),
Mag Silver Corp. (AMEX:MVG) were all punished on Friday when China's consumer price index (CPI) came in higher than expected, increasing to 4.4 percent.
Silver and gold prices all fell significantly as speculation China may battle their inflation by implementing higher interest rates drove down commodities, especially most metals.
Silver for December delivery finished at $25.94 an ounce, while Gold for December delivery ended at $1,365.50 an ounce. Copper for December delivery ended the session at $3.89 an ounce. The record for silver is $50.35, attained in 1980.
The reason silver prices took it hard is it's being considered an alternative to currency, just like gold is. Silver has the dual purpose of being an industrial metal and an investment metal. Investment is driving the price more at this time, so it'll respond similar to gold does in the current economic environment.
Concerning Pan American Silver Corp., they closed Friday's trading session at $36.78, losing $1.47, or 3.84 percent. Endeavour Silver ended the trading day at $6.12, dropping $0.18, or 2.86 percent. Silver Standard Resources closed at $25.51, falling $0.93, or 3.52 percent.
Mag Silver Corp. (AMEX:MVG) were all punished on Friday when China's consumer price index (CPI) came in higher than expected, increasing to 4.4 percent.
Silver and gold prices all fell significantly as speculation China may battle their inflation by implementing higher interest rates drove down commodities, especially most metals.
Silver for December delivery finished at $25.94 an ounce, while Gold for December delivery ended at $1,365.50 an ounce. Copper for December delivery ended the session at $3.89 an ounce. The record for silver is $50.35, attained in 1980.
The reason silver prices took it hard is it's being considered an alternative to currency, just like gold is. Silver has the dual purpose of being an industrial metal and an investment metal. Investment is driving the price more at this time, so it'll respond similar to gold does in the current economic environment.
Concerning Pan American Silver Corp., they closed Friday's trading session at $36.78, losing $1.47, or 3.84 percent. Endeavour Silver ended the trading day at $6.12, dropping $0.18, or 2.86 percent. Silver Standard Resources closed at $25.51, falling $0.93, or 3.52 percent.
Wednesday, November 10, 2010
Morgan Stanley (NYSE:MS) Sees Base Metals Surge Led by Copper
Morgan Stanley (NYSE:MS) sees base metals rallying in 2011, led by copper.
Expectations are consumption will increase at a time when supply is lower and demand rising.
Peter Richardson, chief metals economist at Morgan Stanley Australia Ltd., said, "There is a fundamental aspect to this rally in addition to what's happening to the U.S. dollar. I rank copper first."
According to the International Copper Study Group, refined-copper production in 2011 will fall behind demand, the first such occurrence since 2007.
With potential shortages not priced fully into copper at this time and the move by Ben Bernanke and the Federal Reserve to implement another round of inflating, or quantitative easing, copper and other base metals will continue to rise, again, led by copper.
Expectations are consumption will increase at a time when supply is lower and demand rising.
Peter Richardson, chief metals economist at Morgan Stanley Australia Ltd., said, "There is a fundamental aspect to this rally in addition to what's happening to the U.S. dollar. I rank copper first."
According to the International Copper Study Group, refined-copper production in 2011 will fall behind demand, the first such occurrence since 2007.
With potential shortages not priced fully into copper at this time and the move by Ben Bernanke and the Federal Reserve to implement another round of inflating, or quantitative easing, copper and other base metals will continue to rise, again, led by copper.
Thursday, October 21, 2010
Freeport (NYSE:FCX) Exceeds Expectations on Higher Commodity Prices
Led by higher copper and gold prices, Freeport-McMoRan (NYSE:FCX) soared in the third quarter, with earnings rising by 30 percent over the same period in 2009, rising to $1.2 billion, or $2.49 a share. Analysts had been looking for $2.12 a share.
Revenue was up almost by the same, increasing to $5.2 billion, rising by 27 percent from $4.1 billion last year in the same quarter. That means margins held pretty strongly for the quarter. Analysts had been looking for about $4.63 billion in revenue.
Going forward, the interest rate boost by China has left the industrial metals sector a little weaker than in the recent past, suggesting China may be cutting back on spending to cool down its economy more. That could cut into revenue and earnings in the near-term.
Freeport made a big move for it shareholders with dividends, increasing them to $2 a share, a 33 percent increase.
The diversified miner was trading at $95.86, gaining $0.51, or 0.53 percent at 1:17 PM EDT.
Revenue was up almost by the same, increasing to $5.2 billion, rising by 27 percent from $4.1 billion last year in the same quarter. That means margins held pretty strongly for the quarter. Analysts had been looking for about $4.63 billion in revenue.
Going forward, the interest rate boost by China has left the industrial metals sector a little weaker than in the recent past, suggesting China may be cutting back on spending to cool down its economy more. That could cut into revenue and earnings in the near-term.
Freeport made a big move for it shareholders with dividends, increasing them to $2 a share, a 33 percent increase.
The diversified miner was trading at $95.86, gaining $0.51, or 0.53 percent at 1:17 PM EDT.
Thursday, October 14, 2010
Freeport (NYSE:FCX) Fair Value Raised by Morningstar (Nasdaq:MORN)
Morningstar (Nasdaq:MORN) said they are raising their fair value estimate for Freeport-McMoRan (NYSE:FCX) by $4 a share on the soaring price of gold.
"We are raising our fair value estimate for Freeport-McMoRan FCX by $4 per share to reflect the rapid appreciation we've seen in gold over the past few months. In contrast to our long-term price forecast for copper, which is informed by our view of the likely path of supply and demand in the coming years, we rely on the futures curve for our gold price estimate. With the yellow metal now trading at $1,374/oz in the spot market, up from a third-quarter average of $1,227/oz, the valuation implications for Freeport, which is on pace to produce 1.8 million oz this year (down from 2.6 million oz in 2009 due to mine sequencing at Grasberg), are significant," said Morningstar on their Website.
This is important because Freeport and other miners who aren't considered primarily a gold mining company, historically haven't traded at the premiums a large number of perceived pure gold miners have.
So for Freeport to have its fair value raised based on its gold assets could help the company rise in price even more, as the future of its copper business should continue add significant value to the company and its shareholders.
Concerning copper, Morningstar added, "Our higher published fair value estimate also includes the effects of the recent surge in copper prices, now at $3.81/lb in the spot market (thanks, China!), up from a third-quarter average of $3.29/lb."
Freeport is the second-largest copper producer in the world, and can produce up to 1 million ounces of gold at their Grasberg mine. They're also the No. 1 producer of Molybdenum.
Freeport was trading at $99.46, gaining $0.38, or 0.38 percent, at 1:48 PM EDT.
"We are raising our fair value estimate for Freeport-McMoRan FCX by $4 per share to reflect the rapid appreciation we've seen in gold over the past few months. In contrast to our long-term price forecast for copper, which is informed by our view of the likely path of supply and demand in the coming years, we rely on the futures curve for our gold price estimate. With the yellow metal now trading at $1,374/oz in the spot market, up from a third-quarter average of $1,227/oz, the valuation implications for Freeport, which is on pace to produce 1.8 million oz this year (down from 2.6 million oz in 2009 due to mine sequencing at Grasberg), are significant," said Morningstar on their Website.
This is important because Freeport and other miners who aren't considered primarily a gold mining company, historically haven't traded at the premiums a large number of perceived pure gold miners have.
So for Freeport to have its fair value raised based on its gold assets could help the company rise in price even more, as the future of its copper business should continue add significant value to the company and its shareholders.
Concerning copper, Morningstar added, "Our higher published fair value estimate also includes the effects of the recent surge in copper prices, now at $3.81/lb in the spot market (thanks, China!), up from a third-quarter average of $3.29/lb."
Freeport is the second-largest copper producer in the world, and can produce up to 1 million ounces of gold at their Grasberg mine. They're also the No. 1 producer of Molybdenum.
Freeport was trading at $99.46, gaining $0.38, or 0.38 percent, at 1:48 PM EDT.
Tuesday, October 5, 2010
Citigroup (NYSE:C) Drops Freeport (NYSE:FCX) from "Top Picks Live" List
Citigroup (NYSE:C) cut Freeport-McMoRan (NYSE:FCX) from its "Top Picks Live" list, citing recent valuation.
Increase in copper and gold prices has pushed the stock up to levels that Citigroup seems to think are unsustainable, as the share price of Freeport drop in response.
Even so, Citi is maintaining a "Buy" on the firm, saying "the company's
growth prospects, discounted valuation relative to copper futures, free
cash generation, and history of capital return."
Without a hedge and heavily exposed to gold and copper, there is also an increased volatility factor to consider.
But having said that, the continuing loss in value of the U.S. dollar could make Freeport one of the higher performing miners.
Freeport closed at $87.23 Monday, falling $1.90, or 2.13 percent. Citi has a price target of $92 on the miner.
Increase in copper and gold prices has pushed the stock up to levels that Citigroup seems to think are unsustainable, as the share price of Freeport drop in response.
Even so, Citi is maintaining a "Buy" on the firm, saying "the company's
growth prospects, discounted valuation relative to copper futures, free
cash generation, and history of capital return."
Without a hedge and heavily exposed to gold and copper, there is also an increased volatility factor to consider.
But having said that, the continuing loss in value of the U.S. dollar could make Freeport one of the higher performing miners.
Freeport closed at $87.23 Monday, falling $1.90, or 2.13 percent. Citi has a price target of $92 on the miner.
Tuesday, July 20, 2010
Freeport (NYSE:FCX) Earnings Report Should Reveal Economic Conditions
Although many were looking for Alcoa (NYSE:AA) to give some guidance as to economic conditions, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) will probably be a more accurate measure, although combined with Alcoa's numbers, could give a snapshot of where the economy really is at, against the numerous assertions and conflicting reports out there.
Tomorrow morning Freeport gives its earnings report, and it'll be especially important to see the copper numbers, although the secondary molybdenum and gold numbers will be important as well.
But taking into account the importance of copper in the global economy, that is the primary measure to look for from the point of view of economic conditions and where they have been at.
Just like the economies of Europe and the United States, China will be found to have slowed down some after the stimulus money wound its way through the system. Copper in the first quarter was up based on that, and the sales in the second quarter should give a real reading, or at least, more accurate reading of economic conditions when they're not being propped up by governments.
As far as sales goes, Freeport is expected to have sold about 830 million pounds of copper, 15 million pounds of molybdenum, and 270,000 ounces of gold
Analysts are looking for earnings of about $1.32 a share on $3.56 billion in revenue.
Tomorrow morning Freeport gives its earnings report, and it'll be especially important to see the copper numbers, although the secondary molybdenum and gold numbers will be important as well.
But taking into account the importance of copper in the global economy, that is the primary measure to look for from the point of view of economic conditions and where they have been at.
Just like the economies of Europe and the United States, China will be found to have slowed down some after the stimulus money wound its way through the system. Copper in the first quarter was up based on that, and the sales in the second quarter should give a real reading, or at least, more accurate reading of economic conditions when they're not being propped up by governments.
As far as sales goes, Freeport is expected to have sold about 830 million pounds of copper, 15 million pounds of molybdenum, and 270,000 ounces of gold
Analysts are looking for earnings of about $1.32 a share on $3.56 billion in revenue.
Wednesday, June 30, 2010
Freeport McMoRan (NYSE:FCX) Getting Closer Look from Moody's (NYSE:MCO)
Freeport McMoRan (NYSE:FCX) hasn't had a lot of good news on the macroeconomic level lately, and that has caused it to plummet from a 52-week high of $90.55 in January to closing at $61.07 a share on Tuesday.
Consequently, they've had their credit ratings lowered during that time, and word is Moody's (NYSE:MCO) is now reviewing a variety of their ratings to see if any merit being upwardly revised.
Freeport ended Tuesday down $3.59, or 5.55 percent, as the global economic picture seems to be getting bleaker all the time, and consumer confidence is plunging as a result.
Add to this the slowing U.S. housing starts, the Chinese battling inflation in their urban property markets, and the chaos in Europe, and copper doesn't look like it has anything out there to offer it support.
Consequently, they've had their credit ratings lowered during that time, and word is Moody's (NYSE:MCO) is now reviewing a variety of their ratings to see if any merit being upwardly revised.
Freeport ended Tuesday down $3.59, or 5.55 percent, as the global economic picture seems to be getting bleaker all the time, and consumer confidence is plunging as a result.
Add to this the slowing U.S. housing starts, the Chinese battling inflation in their urban property markets, and the chaos in Europe, and copper doesn't look like it has anything out there to offer it support.
Tuesday, June 29, 2010
Freeport-McMoRan (NYSE:FCX) Follows Gold Prices Down
Freeport-McMoRan Copper & Gold (FCX) has mostly suffered from the low price of copper because of slow global demand, but when it doesn't get help from gold, it can get hit even harder, and that was the case Monday, as gold plunged $17.10, falling to $1.238.60.
In the early part of the trading session it got a nice jump, falling just a couple of dollars off its all-time high, but plummeting around 11:00 AM EDT.
Recent behavior in those cases has been for gold to usually recover after 12:00 PM EDT, but that wasn't the case today, as it never regained traction.
Freeport move jointly with the price of gold, ending at $64.66, a drop of $1.91, or 2.87 percent.
In the early part of the trading session it got a nice jump, falling just a couple of dollars off its all-time high, but plummeting around 11:00 AM EDT.
Recent behavior in those cases has been for gold to usually recover after 12:00 PM EDT, but that wasn't the case today, as it never regained traction.
Freeport move jointly with the price of gold, ending at $64.66, a drop of $1.91, or 2.87 percent.
Friday, June 25, 2010
Freeport-McMoRan (NYSE:FCX) Declares Dividend
Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) declared a quarterly dividend on Thursday of $0.30 a share, which will be payable to common stock holders of record as of July 15, 2010, and will be distributed on August 1, 2010.
The Freeport Board of Directors originally announced an annual dividend of $1.20 a share in April, payable in $0.30 increments on a quarterly basis.
The 52-week range of Freeport has been $43.19 to $90.55, closing today at $63.44, a drop of $1.62, or 2.49 percent.
While copper prices have risen over the last three days, demand has plunged along with new housing starts in America, along with China cooling off their hot urban property markets as well.
The Freeport Board of Directors originally announced an annual dividend of $1.20 a share in April, payable in $0.30 increments on a quarterly basis.
The 52-week range of Freeport has been $43.19 to $90.55, closing today at $63.44, a drop of $1.62, or 2.49 percent.
While copper prices have risen over the last three days, demand has plunged along with new housing starts in America, along with China cooling off their hot urban property markets as well.
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