Cochilco cut to U.S. $ 3.05 copper price this year by slowdown in China
Metal production will be record this year reaching 6.07 million tons.
The Chilean Copper Commission (Cochilco) adjusted downward its projections for the price per pound of copper this year, mainly to the lower growth projections for China-country which accounts for 47% of global consumption of the metal and the economy is the main buyer of Chilean copper, given its focus on expanding new consumer-oriented to achieve a more balanced and sustainable growth.
According to the Trends in International Copper Market Report for the period from January to March, the company projected an average value of U.S. $ 3.05 per pound for the year 2014, with a fluctuation range between U.S. $ 2.9 and U.S. $ 3.2, which compares unfavorably with the previous estimate of $ 3.15 delivered in January.
Meanwhile, 2015 provides that the price of metal is placed around U.S. $ 3 a pound, with a range between $ 2.8 and $ 3.2, in line with the estimate of increased market surplus .
Cochilco’s Executive Vice President Sergio Hernandez explained that the serie of measures being implemented by China leads to lower demand for copper and that this situation impacts the financial sector generating volatility.
However, he added that the metal prospects remains positive since demand will remain strong, projecting a 2.5% increase in demand globally and 4.5% in the specific case of China.
Hernandez explained that the potential risks to these projections point to an increased risk in the financial market, a potential aggravation of the situation in Ukraine, up ahead of expected rate of monetary policy in the U.S. and a larger surplus of copper in the market, which for refined copper is expected to be 373,000 tons this year.
Chile will record production in 2014
As for the local production of the metal, Cochilco predicts annual increase of 5% in 2014 to a record 6.07 million tons of copper mine, which according to Hernandez, “says a lot about confidence investment and confidence of the mining companies in the strong economy that the country has for many years and which also projects into the future.”
By 2015, the company projected that the Chilean metal production will rise 2.8%, a figure of 6.24 million tons.
Cochilco said that for now the forecast of U.S. $ 112,000 million in mining investment in 2021 was maintained, but they will give an adjusted figure in June.
Source: Diario Financiero
