Commodity prices are now in a freefall. The bearish downtrend will leave few survivors, especially companies heavily indebted from excessive acquisitions from the past. The mechanics around financial strain for firms like Breitburn Energy (NASDAQ:BBEP) and Cliffs Natural Resources (NYSE:CLF) are easy to grasp for investors. Revenue is falling and is companies cannot manage their debt levels. Freeport-McMoRan (NYSE:FCX), which acquired oil and gas exploration before energy prices fell, is in a dangerous situation. In the copper market, Goldman Sachs thinks copper prices will not rise above marginal costs until 2020. As the stock approaches lows not seen since 2008, is there any compelling reason for investors speculate on a rebound?

Unsurprisingly, Freeport-McMoRan reported terrible Q2 results. The company lost $1.85 billion, or $1.78 per share. The company was profitable after considering the $2 billion write-down. Derivative contracts for crude oil helped boost operating cash flow, but still below capital expenditure levels in the quarter.

BBEP data by YCharts

Freeport-McMoRan's debt is $20.9 billion. For now, liquidity should not concern investors, since there is still $3 billion available from the credit revolver. The only positive developments for the company are the improving operational efficiencies and progress of the project developments. This includes the Grasberg, Morenci, and Lucius projects.

Macroeconomic headwinds

In addition to lower PMI numbers, News that China is failing to prop up its stock market (the Shanghai index fell again by 8.5 percent) suggests copper prices will not recover soon. Since Freeport-McMoRan committed over $4 billion for its capital budget for copper production, investors should expect weaker profitability in the months ahead.

The company did not alter its demand outlook for copper. It still expects China's need for the metal will grow, through 2024: