NEW YORK, Jun 02, 2010 (Dow Jones Commodities News via Comtex) -- High copper prices encourage substitution for cheaper materials but this isn't likely to create serious demand destruction, the chief executive of Freeport McMoRan Copper & Gold Inc. (FCX) said Wednesday.
"What's encouraging about copper is that it's physical capabilities are such that it competes well," CEO Richard Adkerson said. "Fibre optics was supposed to be the death knell for the copper industry a few decades ago, but that didn't happen. Substitution is a natural part of the way the free market works, a fact of life, but it's typically not a principle driver of an application."
Copper prices have soared since the economic downturn crimped demand, more than doubling in 2009 and continuing to rise through 2010 to around USD7,000 a metric ton currently. Consumers sometimes turn to alternative materials like aluminum or plastic when copper prices rise, although Adkerson said copper can be "very difficult to replace."
Adkerson was speaking on a panel at the Metal Bulletin copper conference in New York.