Jul 19, 2012 (Dow Jones) NEW YORK --Tight copper supply and consistent demand have kept copper prices elevated above their historical average levels, Freeport McMoRan Copper & Gold Inc. (FCX) chief executive Richard Adkerson said during the company's second-quarter conference call.
"The outlook for copper, we believe, is very positive, supported by the continued challenges of the industry in terms of supply," Mr. Adkerson said. "Mine disruptions, falling grades at existing mines, delays of constructing new mines are all really supportive," he added.
Copper inventories "have dropped globally" even as economic growth has slowed, Mr. Adkerson said. "Even in Europe, with weak economic demand, copper markets remain relatively tight," he added.
Chinese economic growth has slowed this year, but the country remains an important driver of copper demand, Mr. Adkerson said. Moreover, recent announcements indicate that authorities will support growth through policies and infrastructure spending, which will likely benefit copper demand, he added.
China is "still growing at a substantial rate and the base of that growth is larger," Mr. Adkerson said.
China accounts for around 40% of global copper demand.
In the U.S., a rebound in automotive output has bolstered copper demand, Mr. Adkerson added.
"The market has been supported by the automobile industry, which has now returned to pre-financial-crisis 2008 levels," he said. "Copper demand is stronger than the overall performance of the U.S. economy."
Mr. Adkerson added that while copper prices have been high relative to historic average, "the industry has not responded as it did in the past. The supply has been slow to develop."