Copper price below $3 as mines add a million tonnes
In late afternoon trade in New York on Thursday, December copper was trading at $2.9845 a pound, recovering from a low of $2.9525 hit earlier in the day, but down more than 4% since Tuesday.
It was the first time since March that the red metal traded below the psychologically important $3.00 a pound level on the back of weak economic news out of China, consumer of 45% of the globe's copper, and growing supply side worries.
The copper price fell despite news of exports from the world’s number one producing country Chile fell 21% year-on-year in August.
The South American nation, responsible for more than 10% of world output, exported 443,400 tonnes in August, compared with 561,400 tonnes in 2013. Year to date Chile's output is still growing at 4.5% however.
The latest report by The International Copper Study Group forecast after five straight years of deficits, the copper market should swing into a production surplus in 2015 of an estimated 390,000 tonnes.
ICSG forecasts world refined copper production is likely to increase by about 5% year-on-year to 22.1 million tonnes in 2014 and by a further 4% to 23.1 million tonnes in 2015 as a result of new electrolytic plants coming on stream in China.
A new report by GFMS predicts over the next six months, more than a million tonnes of new copper capacity, or around 6% of global mine production, will come on stream.
On the demand side predicts a global slowdown in the second half of this year to a still relatively robust 3.9% growth, but with "risks skewed to the downside," says GFMS.