FCX's Unit Cash Costs Spike in Q3: Is It Set to Climb Further in Q4?

Core Insights - Freeport-McMoRan Inc. (FCX) experienced a significant increase in its average unit net cash cost per pound of copper, rising to $1.40 in Q3 2025 from $1.13 in the previous quarter, representing a 24% increase driven by a decline in copper sales volumes [1][7]. Financial Performance - FCX's copper sales volumes decreased by approximately 6% year over year in Q3, totaling 977 million pounds, primarily due to the temporary suspension of operations at the Grasberg Block Cave mine in Indonesia following a mud rush incident in September 2025 [2][7]. - The company anticipates a further increase in unit net cash costs to $2.47 per pound in Q4, with a projected full-year average of around $1.68, indicating that lower expected sales volumes will likely impact costs and margins negatively [3][7]. Peer Comparison - Southern Copper Corporation (SCCO) reported a decrease in unit costs, with an operating cash cost per pound of copper at $0.42, a 45% decline from $0.76 in the same quarter last year [4]. - BHP Group Limited (BHP) also saw lower unit costs across its copper operations, with expectations for unit costs for Escondida and Copper South Australia ranging from $1 to $1.50 per pound for fiscal 2026 [5]. Market Position - FCX shares have increased by 23.9% over the past six months, compared to a 39.1% rise in the Zacks Mining - Non Ferrous industry [6]. - The forward 12-month earnings multiple for FCX is currently 28.09, which is a 19.6% premium over the industry average of 23.49 [9]. - The Zacks Consensus Estimate indicates a year-over-year earnings rise of 1.4% for 2025 and 32.9% for 2026, with EPS estimates trending higher over the past 30 days [11].