China Copper Demand Firm But Europe, US, Japan Weak -Freeport

LONDON -(Dow Jones)- China has been the primary driver of copper demand so far
this year, but conditions in the U.S., Europe and Japan remain weak, a senior
executive at Freeport McMoRan Copper & Gold Inc (FCX) said Tuesday.


In a presentation on Freeport's Web site, President and Chief Executive
Richard Adkerson said copper demand has been especially helped by China's
stimulus plan, which is focused on infrastructure spending.


A scarcity of copper scrap has also resulted in higher demand for cathode
there, while purchases of material by the Strategic Reserve Bureau have
similarly boosted consumption, he said.


On the supply side, "involuntary" supply constraints continue, Adkerson said,
with roughly 5% of copper mine production offline.


The collapse in copper prices after a peak in July 2008 of $8,940 a metric ton
resulted in cutbacks at a number of operations as well as project deferrals and
reductions in capital expenditure. Prices are up some 50% since the start of the
year, but are still around half their all-time high.


Freeport itself has said around 180,000 tons in 2009 and 363,000 tons in 2010
is slated to be removed from sales, the largest amount to be taken offline by
any single producer.


But stocks held in London Metal Exchange warehouses are starting to fall,
Adkerson said. LME copper stocks are up around 60,000 tons since the start of
the year but are down 150,000 tons from their peak at the end of February, he
added.