Orders from China, India, Indonesia and Brazil and limited new supply will sustain demand for copper, driving prices up by as much as 5 percent in 2013, said OZ Minerals Ltd., Australia’s third-biggest copper producer.
Copper may average $3.70 a pound to $3.80 a pound in 2013, driven by “urbanization and urban renewal programs in major developing economies and shortfalls in mine production with slower development of new projects,” Terry Burgess, chief executive officer of the Melbourne-based company, said yesterday in an e-mailed interview.
Copper demand in China, the world’s biggest consumer of the metal, is forecast to rise 8.4 percent this year and 5 percent in 2014, according to estimates by Morgan Stanley yesterday. Global demand will exceed supply by 17,000 metric tons in 2013, said the bank. OZ Minerals lowered its annual output target yesterday to a range of 90,000 tons to 95,000 tons and estimated costs will rise at least 25 percent as it begins underground mining to sustain production.
OZ Minerals supports Wood Mackenzie Ltd.’s findings that an additional 6.4 million tons of mined copper will be required by 2022, suggesting a 30 percent increase in demand in the next decade, Burgess said.
Copper averaged $3.61 a pound last year and was trading at $3.68 a pound on Comex in New York as of 10:11 a.m. in Sydney.