Freeport's Adkerson: Global Copper Demand 'Positive'
Tuesday October 22, 2013 12:15 PM
Global copper demand is improving and any supply surplus is likely to be small, says Richard C. Adkerson, vice chairman, president and chief executive officer with Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX).
“The demand in China during this year has been stronger than many people had expected,” Adkerson says while speaking in a Webcast on the company’s third-quarter earnings. He says sectors of the U.S. economy that use copper are improving, such as construction and automotive.
“And we’re seeing some initial signs of improvement in Europe through demand activities,” Adkerson says. “Globally, premiums for downstream copper uses are strong. Consumer inventories remain low, and the demand side is positive.”
Many analysts are calling for a supply surplus this year of a few hundred thousand metric tons, in large part as mine output increases. However, Adkerson says, the projected surpluses are “small” considering the size of the global market. Analysts have told Kitco News that they look for global mine output in the neighborhood of 17 million to 17.5 million tons this year. “Lots of things can happen that would change that outlook (for a small surplus), as it has over the past 10 years when we were seeing copper supply continually underperforming expectations,” Adkerson says.
“In the longer run, the delay in projects with companies cutting back capital (spending) points to a supportive copper supply situation.”
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