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Commodities Assets Under Management Plummet 43% in 2008

Strategic Insights

— 1 min read

The commodities market witnessed a drastic decline in assets under management, falling by 43% in 2008 to $154 billion, a record low, according to a note from Barclays Capital. The sharp downturn in commodity prices was the primary contributor to this significant drop. Freeport McMoRan Copper and Gold Inc. (FCX) has scaled back its copper and molybdenum operations, as well as reduced capital expenditures, due to the severe decrease in commodity prices in late 2008. Despite these challenges, the company remains optimistic about the long-term prospects for commodities and its business. The company anticipates commencing facilities commissioning at its Tenke Fungurume copper and cobalt project in the Congo during the second quarter and reaching commercial-production levels later this year.

Key Takeaways:

  • Commodities assets under management plummeted by 43% in 2008, falling from a record $270 billion to $154 billion, as noted by Barclays Capital.
  • Freeport McMoRan Copper and Gold Inc. (FCX) is scaling back its copper and molybdenum operations due to severely decreased commodity prices in late 2008.
  • The company is taking further steps to cope with the deteriorating economic backdrop by reducing output at its North American operations, doubling previously announced cuts in 2009 sales.
  • The Tenke Fungurume copper and cobalt project in the Congo is expected to commence facilities commissioning during the second quarter and reach commercial-production levels later this year.
  • Copper prices on the London Metal Exchange shot higher, spurred by technical indicators, US dollar weakness, and output cuts.
  • Freeport McMoRan Copper and Gold Inc. (FCX) remains confident about the long-term prospects for commodities and its business.

Statistics:

  • 43%: Decline of commodities assets under management in 2008.
  • $270 billion: Record high commodities assets under management at the end of the second quarter.
  • $154 billion: Decline of commodities assets under management in 2008.
  • 2009: Year in which Freeport McMoRan Copper and Gold Inc. (FCX) anticipates commencing facilities commissioning at the Tenke Fungurume copper and cobalt project.
  • Second quarter: Projected time frame for facilities commissioning at the Tenke Fungurume copper and cobalt project.
  • Later this year: Expected time frame for reaching commercial-production levels at the Tenke Fungurume copper and cobalt project.

Sources:

  • Barclays Capital
  • Dow Jones Commodities News
  • Dow Jones Newswires
  • Elisabeth Behrmann, Dow Jones Newswires

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