Reuters quoted Freeport McMoRan Copper & Gold Inc as saying that copper market's prospects for 2010 are as yet uncertain and a strong Chinese economy will be key to demand.
Mr Richard Adkerson CEO of Freeport said that there are a lot of uncertainties 2010 depends on China and how its economy performs. China currently appears strong. There are a lot of stimulus activities in place to help economies recover. If they are effective we could see a strong situation. He said that for much of 2009 copper prices have been underpinned by strong Chinese buying, some of which went into stockpiles.
Freeport remains cautious on the 2010 outlook for now though and Mr Adkerson said that it needed to be prepared for different scenarios 2010. We have a number of large scale investments available to us but we're being very cautious about increases in capital spending or production that was curtailed last year.
Last week, Freeport said that it had revived its plan to extend the life of its El Abra mine in Chile taken as a sign of the industry's growing optimism on the global economy. In September, the company said that it would reopen the molybdenum plant at its Cerro Verde copper pit in Peru.
Mr Adkerson said that Freeport's copper production was currently running at about 4 billion lbs 2009 or around 20% below anticipated levels. In response to the global economic crisis, the company took several measures including deferring capital spending and scaling back production. The bulk of the capacity idled was at its higher cost facilities in the US. But the company would be quick to restart mothballed capacity if market conditions warranted such a move.
He said that "When the market requires incremental copper and molybdenum production, we're going be there ready to go forward with it."
Mr Adkerson said that "Over a longer time frame the dynamics of supply and demand are very supportive for prices."
In July 2008, world copper prices reached an all time high of USD 8,940 per tonne. Despite falling sharply during the remainder of 2008 they are now more than double their end 2008 levels.
