China Copper Demand Firm But Europe, US, Japan Weak -Freeport
May 12 2009 - 7:53AM
Dow Jones News
China has been the primary driver of copper demand so far this
year, but conditions in the U.S., Europe and Japan remain weak, a
senior executive at Freeport McMoRan Copper & Gold Inc (FCX)
said Tuesday.
In a presentation on Freeport's Web site, President and Chief
Executive Richard Adkerson said copper demand has been especially
helped by China's stimulus plan, which is focused on infrastructure
spending.
A scarcity of copper scrap has also resulted in higher demand
for cathode there, while purchases of material by the Strategic
Reserve Bureau have similarly boosted consumption, he said.
On the supply side, "involuntary" supply constraints continue,
Adkerson said, with roughly 5% of copper mine production
offline.
The collapse in copper prices after a peak in July 2008 of
$8,940 a metric ton resulted in cutbacks at a number of operations
as well as project deferrals and reductions in capital expenditure.
Prices are up some 50% since the start of the year, but are still
around half their all-time high.
Freeport itself has said around 180,000 tons in 2009 and 363,000
tons in 2010 is slated to be removed from sales, the largest amount
to be taken offline by any single producer.
But stocks held in London Metal Exchange warehouses are starting
to fall, Adkerson said. LME copper stocks are up around 60,000 tons
since the start of the year but are down 150,000 tons from their
peak at the end of February, he added.
-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413;
andrea.hotter@dowjones.com