Jim Letourneau's Blog

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Copper Tone

Phelps Dodge  Posted by Hello

Phelps Dodge (PD) is moving up nicely on news of potential mine strikes in Peru. Copper prices have been basing between US$1.10 and $1.40/lb for the last 6 months.

Since Phelps Dodge's production costs are approximately US$0.70/lb they are leveraged to copper prices. Mines that were at break-even levels last summer are now immensely profitable. Since last summer the price of copper doubled while the price of Phelps Dodge (PD) tripled. Higher cost producers have the most leverage to copper prices so it might be time to make a list of copper companies.

You can get a visual comparison of the relative performance of Phelps Dodge and copper price on this Stockcharts.com chart. Moving the bottom slider allows you to look at different time frames.

I do not own Phelps Dodge