Southern Copper Corporation (NYSE:SCCO) Q2 2024 Earnings Conference Call July 22, 2024 11:00 AM ET

Company Participants

Raul Jacob - VP Finance, Treasurer and CFO

Conference Call Participants

Carlos de Alba - Morgan Stanley
Marcio Farid - Goldman Sachs
Alejandro Demichelis - Jefferies
Sofia Martin - GBM
Hernan Kisluk - MetLife
Alfonso Salazar - Scotiabank
Myles Allsop - UBS
Jonathan Brandt - HSBC
David Feng - CICC

Operator

Good morning, and welcome to Southern Copper Corporation's Second Quarter and Six Months 2024 Results Conference Call. With us this morning, we have Southern Copper Corporation's Mr. Raul Jacob, Vice President Finance, Treasurer, and CFO, who will discuss the results of the company for the second quarter and six months 2024, as well as answer any questions that you may have.

The information discussed on today's call may include forward-looking statements regarding the company's results and prospects, which are subject to risks and uncertainties. Actual results may differ materially and the company cautions not to place undue reliance on these forward-looking statements.

Southern Copper Corporation undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. All results are expressed in full U.S. GAAP.

Now, I will pass the call on to Mr. Raul Jacob.

Raul Jacob

Thank you very much, Carmen. Good morning, everyone, and welcome to Southern Copper's second quarter 2024 results conference call. At today's conference, I'm joined by Mr. Oscar Gonzalez Rocha, CEO of Southern Copper and Board Member; as well as Mr. Leonardo Contreras, who is also a Board Member.

In today's call, we will begin with an update on our view of the copper market and then review Southern Copper's key results related to production, sales, operating costs, financial results, expansion projects, and ESG. After this, we will open the session for questions.

Now, let us focus on the copper market. The London Metal Exchange copper price increased 15% from an average of $3.85 per pound in the second quarter of 2023, up to $4.42 this quarter. Based on the production cuts announced by several producers and other information to date, we're expecting a market deficit of about 217,000 tons of copper for 2024.

At this point in time, we estimate that the copper supply will increase slightly by 0.6% or that about 0.5% or 0.5 percentage point. Looking at the demand, even though we see weak China's demand mainly from its real-estate market, a resilient U.S. economy, and new demand from decarbonization technologies as well as artificial intelligence are supporting copper demand and prices.