yahoo.reuters.com
Phelps Dodge sees positive copper price outlook
Mon May 16, 2005 04:27 PM ET
NEW YORK, May 16 (Reuters) - With copper demand remaining strong and supply growing modestly, the outlook for red metal prices should stay positive, an executive of Phelps Dodge Corp. (PD.N: Quote, Profile, Research) , the world's No. 2 copper producer, said Monday.
"We have a positive outlook for metal prices going forward," Timothy Snider, Phelps Dodge president and chief operating officer, said at Goldman Sachs' basic materials conference.
"We believe demand is strong today. And, assuming there are no major problems in the Chinese or U.S. economies, demand will remain strong," the executive said.
Over the long term, he said, "We do not see big projects that could upset the supply/demand balance. There are not a lot of threats from the supply side."
Snider said Phelps Dodge expected global copper supply to be 8 percent higher in 2005 than in 2004, acknowledging that there were several supply disruptions last year.
"Phelps Dodge and others ramped up production in '04, and you are seeing the impact of that in '05," Snider said. "But I do not agree that a large supply is coming on line this year."
He also pointed out that copper inventories are near historic low levels of about 3 weeks worth at current levels of consumption.
At the COMEX division of the New York Mercantile Exchange, benchmark July copper (HGN5: Quote, Profile, Research) finished 0.65 cent lower at $1.3460 a lb., after hitting a 3-1/2-month low at $1.33.
Since Thursday, July copper had lost close to 8 percent after hitting Monday's low, a level last seen on Feb. 3.
Market participants said they thought much of the recent selling could be attributed to a dollar/euro premium that is being unwound as the U.S. currency advances on a series of positive economic reports.
They added that copper may be finding price levels that reflect its positive fundamentals.
Snider also said prices for molybdenum should also remain strong in the near term.
On Monday, Western grade molybdenum oxide was quoted at $34.00 a lb., with ferro-molybdenum quoted at $81.50 per lb.
Molybdenum is often a by-product of copper mining. |
