Freeport Slumps Most Since '08 as Copper Prices Drag Down Miners

  • Freeport shares drop most among companies in S&P 500
  • World mining index falls as BHP touches lowest since 2005

Copper producer shares plunged as prices of the metal reached a fresh six-year low on concerns the economic slowdown is worsening in China, the world’s biggest consumer.

Freeport-McMoRan Inc., the top publicly traded copper producer, tumbled as much as 20 percent, the biggest intraday loss since 2008 and leading declines for companies tracked by the Standard & Poor’s 500 Index. BHP Billiton Ltd., the world’s largest miner, reached the lowest in a decade. Chinese stocks tumbled after data over the weekend showed the country’s inflation in December stayed at about half of the government’s 2015 target.

The Bloomberg Industrial Metals subindex slumped 3.9 percent last week as Chinese growth concerns sparked global market turmoil and fanned fears that the nation’s demand for commodities will drop further. The Bloomberg World Mining Index of 80 equities on Monday fell for a fourth day, to the lowest since 2004.

“The continuation of the weakness in Asian equity markets continues to build concerns about Chinese demand in copper,” David Meger, the director of metals trading at High Ridge Futures in Chicago, said in a telephone interview. “There’s the obvious correlation of weakness in the equity market and the expectation of that being in close correlation with a weak Asian economy.”

On the Comex, copper futures for March delivery slumped 2.4 percent to settle at $1.9725 a pound at 1:12 p.m. in New York, after touching $1.9665, the lowest since April 2009. On the London Metal Exchange, copper, aluminum, nickel, lead, tin and zinc dropped.

Stockpiles of copper in warehouses tracked by the LME climbed to highest in more than a month, indicating supplies are becoming more ample.

BHP shares fell 4.9 percent in Australia after touching the lowest since May 2005. Phoenix-based Freeport fell to the lowest since 2001.

Alcoa Inc., the biggest U.S. producer of aluminum, unofficially kicks off the reporting season after markets close Monday. The shares retreated for an eighth straight session.

"Markets are pricing slower growth in China," Jens Naervig Pedersen, an analyst at Danske Bank A/S in Copenhagen, said by e-mail. "The base-metals market badly needs some comfort from U.S. and Chinese monetary policy makers and stronger macroeconomic key figures."

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