Freeport McMoran 4Q13 Earnings Call Notes

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A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

Copper demand strengthening

“copper markets appear to be strengthening from where we were a year ago.”

China went through change to internal focus, but infrastructure spending still a big part of things

“During 2013, China went through a government change, a reorientation of its economy towards internal consumption with less emphasis on exports and infrastructure development and major spending on infrastructure continues as evidenced by the recent announcement by state grid to increase its capital spending and that has a major impact on copper consumption there, but consumer demand remains strong. Infrastructure investment in China is a major part of this marketplace.”

Budgeting for $100-$105 oil

“So we continue to maintain our budget process between $100 and $105 a barrel of Brent and going forward. based on the production struggles around the world, grow production from North America and also the aspect of consumption demand expanding around the world on a consistent basis that we continue to see accelerating this year.”

More optimistic about China than a year ago

“In China you do have this copper that’s in the bonded warehouses that are off-exchanges. So depending on how that goes, depending on how these financing deals go, but when you look at the performance of the economy in China, even though there’s some slowdown, the size of the economy is growing to the extent that the somewhat lower percentages still translate into very substantial amounts of copper demand. So we are optimistic about it. We are also realistic to know that there could be changes depending on how the manage the inventories, how these financing transactions work and just how their whole activities go but we are optimistic about it. And as I said, I think in general, that market is much more optimistic about it than they were a year ago.”