Copper Miners Surge Amid Glencore Production Decline

Shares of copper miners Glencore (GLNCY) and Freeport-McMoRan (FCX) are rallying on Tuesday after Glencore reported a 2019 shortfall in copper output. Earlier on Tuesday, Glencore said that its own-sourced copper production of 1,371,200 tonnes was 82,500 tons, or 6%, lower than in 2018. Approximately half of this related to the African Copper assets, with Katanga's ramp-up, partially offsetting Mutanda scaling down and placement into temporary care and maintenance and Mopani's extensive smelter refurbishment shutdown. The remainder primarily comprised relatively minor portfolio changes and maintenance.

TRADE ISSUES SIDELINE M&A: On January 13, Freeport-McMoRan CEO Richard Adkerson said that the miner has no interest in major strategic deals over the next three years, the Wall Street Journal's Alistair MacDonald reported. The comments potentially stymie informal overtures from Barrick Gold (GOLD), as Barrick CEO Mark Bristow told reporters that there is a logic in a tie-up with Freeport, MacDonald noted. Adkerson, on the other hand, said that his company is too focused on the engineering challenge of turning Grasberg from open-pit mining into an underground operation to consider M&A, and he added that market challenges related to the U.S.-China trade dispute mean this isn't the best time for big strategic moves, the author noted. "Our company is laser-focused on completing that, so we are focused on that and not M&A opportunities," Adkerson told The Journal. "After that is complete, we would be in a position to look at a number of alternatives that could be attractive to our shareholders," he said.

PRICE ACTION: Shares of Glencore are up around 5% to $6.00 per share while Freeport is up 6% to $12.12 per share.

OTHERS TO WATCH: Southern Copper (SCCO) shares are up over 4%, while Turquoise Hill (TRQ) shares are up 1.5%.

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