On Friday, spot copper reversed recent gains trading at $3.44 a pound, down 2.5%, in early afternoon dealings in New York.
The pullback came after Chinese officials issued a warning to local governments to curb property speculation and overbuilding.
Like iron ore used in steelmaking, copper's fortunes have been increasingly tied to Chinese investment in infrastructure and any weakness quickly impacts the price of the metal.
However, despite the slowdown in the world's second largest economy, the globe's copper producers remain bullish about the fundamentals of the market.
Yesterday in a conference call with investors Richard Adkerson the chief of Freeport-McMoran, the second largest producer of the metal, said the outlook for copper is "very positive, supported by the continued challenges of the industry in terms of supply. Mine disruptions, falling grades at existing mines, delays of constructing new mines are all really supportive."
FCX's comments echoed that of Chile’s deputy mining minister, Pablo Wagner, who said exports should rise 5% – 6% in 2012 over last year and that “signs of demand, shipments and inventories, continue to be solid.” Chile's state-owned copper giant Codelco's output dwarfs other global producers of the metal.
The International Copper Study Group released data showing the global market for refined copper fell into a deficit of 236,000 tonnes during the first quarter versus a deficit of 61,000 tonnes at the start of 2011.
Supplies in the industry – around 16 million tonnes of concentrate per annum – have been largely flat for a number of years although research from Wood Mackenzie, a consultancy, forecasts greater growth in supply of the metal next year and in 2014 than over the past 13 years.
Marginal costs which for copper producers are in the $6,000 – $7,000 a tonne range or roughly $2.75 – $3.15 a pound.