The prices of listed resources stocks of all kinds started falling in and around May this year. This held for most listed copper miners as well, but for some months, the prices of listed copper miners fell disproportionately more than the underlying dollar copper price, which, indeed, peaked in July.

The cat is now out of the bag, given the precipitous fall in the dollar copper price over the past three weeks or so, in particular, and its fall by just under 50% from all time record highs seen in July this year.

A leading copper producer such as Antofagasta is now trading 64% off its stock price highs; its price has fallen 46% in the past month alone.  Freeport-McMoRan, the world’s biggest listed miner of copper, and also ranking as a Tier I gold producer in line with the substantial volume of its gold production, is 71% off its highs, and down by 66% in the past three months alone.

For months now, base metal specialists, such as those in and around the London Metal Exchange, have commented that copper prices have been trading at roughly twice the average cost of world production. Whatever the actual figures are, there has been a general sense that copper prices were in for a big fall.

Other base metal prices – with the ongoing exception of aluminium – started peaking from about two years ago. While copper is now 46% off its highs, aluminium, which peaked like copper in July this year, has fallen 35% to date. But while copper prices moved up over the past five years by roughly 400% to peaks, aluminum rose by little more than 100%. The longer term relative moves of prices for aluminium, of which some 40m tons is produced annually, and prices of copper (22m tons) suggests that far more speculative money moved into copper metal.

BASE METALS

USD/t

USD/lb

From high*

From low*

Copper

4790

2.17

-46.4%

4.8%

Aluminium

2215

1.00

-34.5%

3.0%

Nickel

12175

5.52

-65.4%

10.7%

Zinc

1450

0.66

-54.8%

14.2%

Lead

1475

0.67

-62.1%

7.3%

Tin

14100

6.40

-44.7%

8.5%

* 12-month

 

 

 

 

The entries into focused aluminium stocks are also somewhat limited. While investors can buy into Chalco, and Alcoa, a member of the 30-component Dow Jones Industrial Average, much of the world’s aluminium output is under the control of diversified stocks such as Rio Tinto, BHP Billiton, and unlisted entities such as Rusal.

In line with the relative underperformance of the aluminium price during the six year so-called commodities supercycle, focused aluminium names have underperformed. Alcoa’s stock price is now back to levels last seen in 1995. The economics of aluminium production is also heavily dependant on prices paid for electricity used in smelting.

By now, everyone knows about what’s happening in global credit, equity, commodity and currency markets. At this point, a good number of listed copper miners are sitting with prices 80% off highs, and some more than 90%. Most names connected to copper production in the Democratic Republic of the Congo and/or Zambia have been particularly badly hit; First Quantum, the leading copper producer on the African continent, is 79% off its highs, leading a pack of names more than 80% down, such as Equinox, Camec, Katanga Mining and Anvil.

The prices for listed copper miners have fallen by an average of 76%, when measured on a weighted basis. The losses are similar to those sustained by the prices of listed miners of diamonds, silver, aluminium, uranium, zinc, tin, and nickel. Nickel stocks rank as the most heavily bludgeoned of the subsectors within global resources, at an average of 83% off highs.

Selected copper stocks

 

 

 

 

Stock

From

From

Value

 

price

high*

low*

USD bn

Freeport-McMoRan

USD 36.35

-71.4%

11.8%

13.957

Southern Copper

USD 11.36

-76.2%

18.3%

10.036

Antofagasta

GBP 3.09

-64.2%

8.0%

5.183

Polska Miedź

PLN 28.52

-80.3%

1.9%

2.126

Jiangxi Copper

CNY 11.60

-85.2%

0.1%

2.713

First Quantum

CAD 22.01

-78.8%

10.1%

1.289

Equinox

CAD 1.39

-80.1%

31.1%

0.703

Camec

GBP 0.09

-85.5%

13.3%

0.397

Katanga Mining

CAD 2.00

-89.4%

60.0%

0.352

Quadra

CAD 7.55

-72.0%

6.9%

0.425

Pan Australian

AUD 0.30

-76.0%

3.4%

0.278

Metorex

ZAR 9.85

-66.3%

12.6%

0.385

Palamin

ZAR 51.55

-68.2%

9.7%

0.263

Mercator

CAD 2.40

-81.5%

14.3%

0.153

Anvil

CAD 2.98

-85.1%

14.2%

0.181

Northern Dynasty

CAD 2.15

-84.3%

5.9%

0.170

Taseko

CAD 1.00

-84.2%

3.1%

0.123

Aditya Birla

AUD 0.64

-84.5%

11.4%

0.128

Corriente

CAD 3.25

-44.4%

30.0%

0.208

Fronteer

CAD 2.50

-80.6%

29.5%

0.177

CuDeco

AUD 1.40

-70.1%

9.8%

0.107

Copper Resources

GBP 1.06

-73.1%

0.0%

0.155

Compass Resources

AUD 0.37

-90.6%

21.3%

0.032

Chariot

CAD 0.15

-88.2%

15.4%

0.042

Teal

CAD 1.00

-81.0%

0.0%

0.046

Copperco

AUD 0.12

-90.2%

9.5%

0.064

ZCI

ZAR 12.00

-58.5%

40.4%

0.160

Centenario

CAD 0.95

-87.2%

23.4%

0.041

Globestar Mining

CAD 0.48

-77.5%

6.7%

0.043

Frontera

CAD 0.30

-96.2%

20.0%

0.019

Amerigo

CAD 0.51

-82.7%

9.7%

0.041

Weatherly

GBP 0.05

-82.5%

0.0%

0.032

Tiger Resources

AUD 0.17

-70.2%

21.4%

0.027

Candente

CAD 0.25

-89.8%

13.6%

0.017

African Copper

GBP 0.05

-95.5%

5.9%

0.011

Monterrico

GBP 0.75

-77.4%

7.1%

0.034

Inca Pacific

CAD 0.27

-88.5%

17.4%

0.013

Exco Resources

AUD 0.13

-75.5%

4.2%

0.020

Coro

CAD 0.25

-88.0%

16.3%

0.008

Discovery Metals

AUD 0.25

-65.3%

0.0%

0.024

Africo

CAD 0.80

-72.4%

12.7%

0.050

Prairie Downs

AUD 0.12

-91.4%

0.0%

0.006

Red Dragon

CAD 0.14

-77.9%

0.0%

0.008

Zambezi Resources

GBP 0.03

-88.4%

0.0%

0.009

African Eagle

GBP 0.03

-80.8%

0.0%

0.010

El Nino Ventures

CAD 0.09

-93.6%

0.0%

0.003

Simberi

CAD 0.01

-90.0%

0.0%

0.001

Averages/total

 

-80.0%

11.7%

40.271

Weighted averages

 

-75.8%

11.9%

 

 

 

 

 

 

Diversifieds with copper

 

 

 

 

Stock

From

From

Value

 

price

high*

low*

USD bn

BHP Billiton

GBP 9.55

-56.7%

8.5%

95.826

Vale

USD 12.06

-72.7%

14.9%

59.094

Rio Tinto

GBP 24.24

-66.2%

6.1%

59.655

Anglo American

GBP 14.21

-61.4%

8.3%

32.523

Xstrata

GBP 12.23

-72.4%

10.0%

20.253

Norilsk

USD 5.25

-84.3%

12.4%

10.008

Teck

USD 14.31

-73.3%

7.8%

6.307

Vedanta

GBP 7.55

-72.9%

3.7%

3.709

Sterlite

USD 5.75

-80.2%

14.5%

4.073

Lundin

CAD 1.98

-85.8%

4.8%

0.659

Kazakhmys

GBP 3.35

-83.0%

4.5%

3.051

Ivanhoe

CAD 3.60

-76.8%

0.0%

1.152

Inmet

CAD 28.65

-74.4%

2.0%

1.179

Northgate

CAD 1.05

-69.9%

9.4%

0.229

Oz Minerals

AUD 1.02

-76.5%

0.0%

2.038

Polymet

CAD 1.20

-73.3%

18.8%

0.140

Mwana Africa

GBP 0.07

-88.5%

0.0%

0.047

EMED Mining

GBP 0.14

-55.9%

0.0%

0.057

Averages/total

 

-73.6%

7.0%

300.000

Weighted averages

 

-68.0%

9.2%

 

* 12-month

 

 

 

 

Source: market data; table compiled by Barry Sergeant