FCX had a detailed 45 slide presentation which can be seen on their website. Slide 26 sums up everything for me as a long term investor
FCX will earn $12billion EBITDA in 2015 assuming the following prices
Cu $3, AU $1500 Oil $100 and Gas $4.50
This year we will have EBITDA of approximately $6billion if we avg $3.20 for copper
I recommend that all longer term investors look at their presentation
The Chinese Warehouse levels dropped 4,600 tons this week. this is the third week of weekly drops, the previous drops being 16,000+ tons and 6,500 tons the week before that. Officially a trend. there is also a general positive correlation between the SHFE drops and the levels of the non-reporting warehouses in China. So this is good. However, the three weekly drops only bring the SHFE warehouse levels down to 223,000 tons, which is still well stocked. Need the warehouse drawdowns to continue over the next half dozen weeks before you'll see any impact on the spot price of copper. Price firming likely will not occur until SHFE levels approach 160K tons. Just something to keep an eye on.
I agree price will rise. Some of the reason is the need for more currency worldwide, and the extraordinary demand for dollars.. Population growth around the world, ie in US alone we have gone from 250 in 1990 to 301 in 2008 and projected to 350 in 2025. Similar for the rest of the world, resulting in the need for more currency particularly as money is moving all over the world. IMHO, this will result also in an increase in commodities as more people are able to buy them.
It is really difficult for me to understand why the world's major Central Bankers can print money and think that we will not have inflation. This will end very badly. I am retired and only buy out of favor investments and I focus on the industry leaders. The only thing I don't like about FCX is that their senior mgmt. personally are benefiting from the current acquisition. It is probably ok, but it looks bad and WS is suffering from appearance of unethical activity. As you are aware, commodity prices are volatile, but the long run demand for copper will increase and so will the price of FCX over the next couple of years
I agre and hard assets (real estate, commodities, land etc) will go up in value. If FCX can sell copper for $4 in 2015, their Earnings before taxes, Interest depreciation and amortization will exceed $16 billion. We will easily se a share price of $60