Chile's cheerless outlook for copper price

In New York trade on Thursday copper for delivery in July continued to drift lower as top producer Chile painted a mixed picture for the metal.

July copper futures were lasting trading at $2.27 per pound, just holding onto the psychologically important $5,000 a tonne level. The price of copper is up solid 17.2% from a seven-year low hit mid-January.

The Chilean Copper Commission cut its prediction for global refined copper demand this year from 2.3% to 1.8% as Chinese consumption representing nearly half of the global total continues to moderate.

A 35% surge in production from Peru and huge jumps in Mexico and Indonesia which will more than offset declines in the DRC and static output in Chile

The government forecaster also expects supply to increase by a substantial 5.1% or 985,000 tonnes this year to 20.25 million million tonnes, much faster than the body expected at the start of the year.

The increase in output will be mainly on the back of a 35% surge in production from Peru and huge jumps in Mexico and Indonesia which will offset declines in the DRC and static output in Chile, which produces nearly 30% of the world's copper. 2017 will see a further jump of 2.9%.

A 4% drop in available scrap copper to around 3.6 million will be enough according to Cochilco to result in a smaller market surplus this year of 140,000 tonnes compared with the 198,000 tonnes it forecast in January. While still in oversupply 2017's predicted excess tonnage was slashed to 92,000 tonnes, from 168,000 previously.

Cochilco is sticking to its downbeat price forecast for 2016 of $2.15 a pound ($4,740 a tonne) rising only slightly to $2.20 next year ($4,850). That compares to a 2015 average of $2.49 or $5,490.