PHELPS DODGE &lt;PD> SEES STRONGER COPPER PRICES
  Phelps Dodge Corp officials said good
  fundamentals in copper markets should lead to improving prices
  for the metal.
      In an interview with Reuters, chairman G. Robert Durham
  said continued strong demand and low inventories pushed prices
  up eight to nine pct on the New York Commodities Exchange last
  month.
      "Our customers in this country are living off the tailgates
  of our trucks," he said, referring to tightness of supply and
  strong demand. "The fundamentals are good."
     
      Asked if metal prices will continue to rise, Durham said;
  "All I know is, fundamentals cannot be ignored."
      He said copper supplies are lower than they have been for
  almost 20 years. Last year, copper demand was second highest on
  record behind 1984, he said.
      Phelps Dodge is the nation's largest copper company, with
  annual production expected to reach 500,000 tons this year.
     
      During the interview, executive vice president Douglas
  Yearley said he believed it was only a matter of time before
  the copper price rose "because there aren't that many new
  projects coming on, and demand, short of a major recession,
  will continue to grow modestly."
      Copper for July delivery rose more than two cts a pound to
  more than 69 cents in Comex trading today. A one cent a pound
  rise in copper prices yields 10 mln dlrs in annual earnings for
  Phelps Dodge, the company said.
      "Demand has been surprisingly good in 1987, in construction
  and other areas," Yearley said.
     
      New production later this year from a Bingham, Utah, mine
  owned by Kennecott Corp, a unit of British Petroleum Co PLC's
  &lt;BP> Standard Oil Co, a mine in New Guinea and Phelps Dodge's
  own expanded Morenci, Ariz., mine will be offset by production
  shortfalls in Mexico and Zambia, he said.
      Durham said production costs at the New Mexico-located
  Chino mine will be in line with conventional copper production
  at the company's other mines by the fourth quarter. The
  company's total production costs, including depreciation but
  before interest and corporate expense, should be below 50 cts a
  pound by late 1989 or 1990, he said.
  

