What happened

Shares in copper miner Freeport-McMoRan (FCX 0.75%) declined 6.5% by midday ET Tuesday. The move comes as part of a broader market sell-off in stocks and a decline in the miner's essential commodity, copper. Having started June trading at about $4.50 per pound, the price of copper stood at $3.44 per pound today.

The decline reflects investor fears that global growth will slow markedly and take down copper demand. Copper is traditionally seen as a cyclical metal because of its use in construction, electrical networks, industrial machinery, transportation, and consumer products.

So what 

Freeport's management believes its earnings before interest, taxation, depreciation, and amortization (EBITDA) and operating cash flow will fluctuate by $425 million and $330 million, respectively, every time there is a $0.10 movement in the price of copper. So, it's understandable if investors are concerned by the rapid decline in the industrial metal. 

That said, Freeport is still highly profitable at the current levels, and it's hard not to think the 47% slump in the stock price over the last three months is the market assuming significantly lower copper prices over the long term. In addition, the slump in copper price probably reflects a lot of speculative money flowing out of the trade now that the Federal Reserve has hiked interest rates. 

Now what

Investors will have to wait until the market adjusts to the interest rate tightening cycle to see where copper prices end up. The long-term case for copper and Freeport-McMoRan is still intact, but the sentiment is against the sector. At least, for now.