Codelco chief says copper to test year lows
FT reports Diego Hernández, chief executive of Chile's state-owned copper giant said in an interview that copper would trade "between $7,000 and $8,800" in 2012.
The last time copper cost $7,000 a tonne was at the start of October 2011, which was a level last seen in mid-July 2010.
Codelco is responsible for roughly 10% of global copper production and acts as a bellwether for the industry.
Hernández told the FT: “There is a concern and we are seeing some volatility on price for the short term. But we believe after 2-3 months the supply-demand trend will prevail.”
Supplies in the industry – around 16 million tonnes of concentrate per annum – have been largely flat for a number of years and no significant new supplies in 2012 will support prices said Hernández.
The red metal is currently trading at around of $8,000 a tonne ($3.60 per pound) – a three month low – as stockpiles in China, the world's number one consumer of the commodity, continue to grow.
The world's metal miners have become increasingly dependent on Chinese economic growth to keep profits and revenues flowing. In March, the China government set a target of 7.5% economic growth this year, the lowest since 2004.
The metal, used in construction and telecommunications, is down from a record high above $10,000 tonne ($4.50 per pound) in February last year.
A survey out yesterday from GFMS predicted a range of $8,300 to $8,800 for the year.