Phelps Dodge to restart idled N. American capacity
Staff -- Purchasing, 3/4/2004 2:00:00 AM
Phelps Dodge Corp. will be restarting closed capacity with a goal of boosting copper production by 11% this year and 17% in 2005 due to strong metal prices and an improving economy.
The world's largest publicly traded copper producer made sweeping output cutbacks at several facilities beginning in October 2001 as red metal prices slumped to multiyear lows and the global economy struggled with recession. But now, because of rapidly rising prices, a global shortage of copper concentrate, robust Chinese demand and supply disruptions at mines of other companies, Phelps Dodge has started to lift production at its Sierrita and Bagdad operations in Arizona.
Steven Whisler, chief executive, projects P-D's total copper production at 2.35 billion lb in 2004 and 2.5 billion lb next year. The restart of the operations in Arizona and other curtailed sites in New Mexico and Chile will increase P-D's production by 240 million lb this year and 370 million lb in 2005. Whisler says Phelps Dodge will bring back output over the three quarters and "will be careful not to flood the market with supply."
Whisler says the Phoenix-based company "is very optimistic about the prospects of this year's demand upturn." Note: Art Miele, senior vice president, is forecasting an average 2004 copper price of $1.10/lb, which is almost a dime ahead of the consensus forecast. Miele expects overall world copper consumption to grow more than 5% this year, with about 10% growth in top-consumer China and 4-5% growth in the U.S.
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