Freeport-McMoRan Copper & Gold Inc, the world's largest publicly traded copper firm, is betting on robust Chinese copper demand to drive its industry, even as slower growth in Europe and the United States impacts some lines of business, the company's CEO said on Thursday.
"The fact that Europe will be in a period of no growth, or maybe even slightly negative contraction, and the US is in slow growth; Asia continues to do well ... we're going to be all right," Richard Adkerson, the company's chief executive, said during a meeting with Reuters reporters on Thursday.
"China continues to grow and they've got a real focus on infrastructure development and developing their consumer economy. That is requiring copper." China is the world's largest copper consumer, accounting for about 40 percent of the world's copper demand. It was a big reason behind the rally earlier this year to records above $10,000 per tonne in London and $4.60 per lb in New York.
Even a downturn this year in China's exports of manufactured goods that use copper, stemming from the troubles in the West, failed to shake Adkerson's bullish outlook for his industry. "In early 2009, there was dire predictions about China because of their export market, but it just didn't materialise. What's showing is that their internal infrastructure build and their internal economy is off-setting that (concern)," said Adkerson.
"You go over there and you see automobiles on the street and you see buildings being built ... air conditioner units all in China, not for export." In the United States, Adkerson said he saw "relatively healthy" conditions for the copper market, in line with a path of lower economic growth.
"There are segments that are still very weak in the construction area, but there are segments that are still doing relatively well: general manufacturing, particularly manufacturing related to exports," he said. "Our business here is not growing rapidly, but it's relatively healthy."
Longer-term, Adkerson believed the industry will thrive as the global economy will continue to grow, and continue to depend on the metal to maintain that growth. "Because of the fundamental uses of copper in the world, it is needed for any kind of development activities ... as the standard of living around the world increases, it's going to require a lot of copper. "We are very positive about it, and we are running our business with that positive view."