NEW YORK Freeport-McMoRan Inc.s realized copper prices have been flat, but the company expects prices to be strong going forward.
"Copper prices have demonstrated strength," chief executive Richard Adkerson said during an earnings conference call July 23. "Exchange inventories are at extraordinary low levels, theres been low scrap flow and significant deferrals of projects across the world. Supply-side issues will continue to be a major support. ... Market surpluses are at much lower levels than expected."
The Phoenix-based company posted second-quarter net income of $482 million, unchanged from the same period last year despite a 28.8-percent jump in sales to more than $5.52 billion. The companys realized price averaged $3.16 per pound vs. $3.17 a year earlier.
Copper demand in the first half of 2014 was a mixed bag for Freeport. While growth in the United States has been mixed and Europe has seen a gradual strengthening, China remains key to the marketplace, Adkerson said. "There have been a lot of questions about Chinas economy and growth rates and theres been an unusual situation of apparently fraudulent activity at a port in China. Theyve been less strong than people expected, but on balance theres been solid demand. Theyve shaken off earlier issues."
Freeport-McMoRans copper production totaled 931 million pounds in the second quarter, up 2.4 percent from 909 million pounds a year earlier. Copper output by the companys North American mines jumped 13.2 percent to 395 million pounds from 349 million pounds in the same comparison, while copper production in South America was virtually flat at 300 million pounds. But Indonesian output fell 12.2 percent to 122 million pounds from 139 million pounds and African production slid 6.6 percent to 114 million pounds from 122 million pounds.
Asked about rumors of Freeport selling its Candelaria Mine in Chile, Adkerson said the company was looking to sell low-growth projects to "aggressive buyers who will pay good prices" while focusing on high-growth projects. "Were looking for transactions that advance our ability to repay our debt."