| Why Freeport Investors Should Track China’s Automobile Industry | |
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Key Indicators Freeport Investors Should Track (Part 8 of 17) (Continued from Part 7) China’s automobile industry
China is the world’s biggest automotive market, where close to 22 million vehicles are sold each year. Copper is highly durable and can be cast into precision shapes. This malleability makes copper and its alloys ideal for making gears and bearings. Copper radiators, motors, brakes, and bearings are used in the automobile industry, with about 50 pounds of copper content in an average mid-sized vehicle.
Uneven car sales
The above chart shows the passenger car sales growth rate in China. Sales grew by 6.44% on a year-over-year (or YoY) basis in the latest reading in February. Sales had increased by an impressive 10.55% in January. The trend in vehicle sales has been quite uneven. China’s automotive sector continues to grow, albeit at a much slower pace over the previous years.
Investors in companies like Freeport-McMoRan (FCX), Teck Resources (TCK), and Alcoa (AA) should closely track China’s automobile industry. FCX currently forms 3.1% of the Materials Select Sector SPDR ETF (XLB), and 3.25% of the SPDR S&P Metals and Mining ETF (XME).
Disposable income
China’s improving disposable income is positive for passenger car sales. With higher income, the consumption of products like automobiles and electric appliances go up. This bodes well for the consumption of all metals.
The manufacturing sector is another major consumer of copper. Due to its corrosion resistance, copper is also used in making tanks, vessels, and pipes that are exposed to seawater. As copper is a good conductor of electricity, it is used in making power cables, motors, transformers, and other electrical equipment. It is also widely used in producing renewable energy production systems.
In the next part, we will discuss the latest trends in China’s manufacturing PMI.
Continue to Part 9 Browse this series on Market Realist:
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VanEck Vectors Global Alternative Energy ETF
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PRODUCER |
CODE : FCX |
ISIN : US35671D8570 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Freeport McMoran is a copper and gold producing company based in United states of america. Freeport McMoran produces copper, gold, cobalt, molybdenum and silver in Chile, in Congo Dem. Rep. of, in Indonesia and in Peru, develops copper in Peru, and holds various exploration projects in Chile. Its main assets in production are CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI and MORENCI - ROM LEACH in Chile, GRASBERG, SIERRITA and BAGDAD in Indonesia, TENKE FUNGURUME and TYRONE in Congo Dem. Rep. of and CERRO VERDE in Peru, its main asset in development is SAFFORD in Peru and its main exploration properties are BAGDAD - ROM LEACH and CHINO - ROM LEACH in Peru and CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH and CLIMAX in Chile. Freeport McMoran is listed in Germany and in United States of America. Its market capitalisation is 2.4 billions as of today (€ 2.1 billions). Its stock quote reached its lowest recent point on March 06, 2020 at 10.00, and its highest recent level on October 10, 2024 at 49.54. Freeport McMoran has 47 442 200 shares outstanding. |