By Kim Khan
Investing – Freeport-McMoRan sank in midday trading Monday as the world’s biggest copper producer fell afoul of the pervasive virus concerns and effect on the Chinese economy.
Freeport-McMoRan (NYSE:FCX) shares sank 6%.
Copper prices also sank, off 3%, heading for their ninth-straight down session, which would be the metal’s longest losing streak in six years.
China, the world’s top buyer of metal, is hitting worldwide investments as concerns of a wider spreading of the coronavirus and an economic slowdown grew. The government has taken emergency measures to contain the disease, like extending the Lunar New Year holiday, as the death toll hit 81.
Copper, regarded as a bellwether of the global economy, has given up all of its gains since early December when a rally pushed prices up nearly 10% to eight-month highs as investors welcomed the first phase of a U.S.-China trade deal and hoped for a rebound in economic growth.
"Chinese demand accounts for about 50% of the majority of base metals and looking at the latest data regarding the coronavirus, it's now spread quite widely," said analyst Timothy Wood-Dow at BMO Capital in London.
“On Friday, we didn't know this, it seemed quite contained. Now this wider geographical spread is very concerning, so that's feeding through to the market."
Freeport sold off last week following its fourth-quarter earnings report. While profit was better-than-expected, it was down more than 80% from the year-ago period.
Shares had been up sharply going into the report.
-- Reuters contributed to this report.