Freeport McMoRan CEO: Copper Market Headed For Deficit In 2012

Freeport McMoRan Copper & Gold Inc.'s (FCX) chief executive said the fundamentals of the copper market remain strong, supported by low inventories of the industrial metal in Europe and the U.S. and ongoing infrastructure projects in China.

"Overall the copper market continues to be positive given the uncertainties we've been living with...2012 appears to be another year of a deficit in the copper market," Richard Adkerson said on the company's first-quarter earnings conference call.

"The industry continues to face supply constraints from interruptions to existing operations and the challenges of bringing on new projects," he said, adding that global inventories of copper remain low.

China, the world's largest consumer of copper at about 40% of global output, continues to investment in infrastructure even as it takes steps to control its economic growth.

"China remains the important demand driver. As I indicated, investments in urbanization and infrastructure support the market place. All of those investments require significant amounts of copper," Adkerson said. He added that as the size of China's economy increases, incremental growth translates into significant copper consumption.

Europe, which as a region is the world's second-largest copper consumer behind China, remains a point of concern.

"Europe is weak, but it is not as weak as some feared going into the second half of 2011," Adkerson said.

Meanwhile, an uptick in manufacturing, "particularly auto sales," has contributed to greater consumption, Adkerson said.

-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; [e-mail]