April 30 (Bloomberg) -- Copper prices are falling on expectations of a slowdown in the Chinese economy and rising copper stocks on the London Metal Exchange, said Raul Jacob, chief financial officer of Southern Copper Corp., the largest producer of the metal in Peru and Mexico.
Copper prices will rebound later this year on rising demand from Asia, which represents 60 percent of world copper consumption, and reduced copper supply by labor stoppages and technical problems, Jacob said.
“Even though we believe this metal’s fundamentals are sound, its price has been affected by concerns about Chinese growth, LME stock increases and macroeconomic worries related to the U.S. fiscal deficit and Europe’s debt crisis,” Jacob said today on a conference call. “We believe this is part of the commodities cycle and a temporary event.”
Copper futures for delivery in July declined 1.3 percent to $3.1855 a pound at 1:35 p.m. on the Comex in New York. Prices are down 6.2 percent this month, headed for the biggest drop since October. LME-monitored global stockpiles have climbed to the highest since 2003 according to Bloomberg data.
Phoenix, Arizona-based Southern Copper, which is investing $6.5 billion to almost double annual copper output to 1.2 million metric tons by 2017, will be poised to tap stronger copper prices in the future, Jacob said. The company aims to keep operating costs at 91 cents per pound of copper this year, he said.
The company “is not considering” acquisitions and aims to accelerate investments in the second half to meet its $1.8 billion capital expenditure target this year, Jacob said. Ore grades at Buenavista, Mexico’s largest copper mine, will stabilize next year after declining last quarter, he said.
Southern Copper April 26 announced first-quarter net income fell 20 percent to $495.4 million, or 59 cents a share, matching analysts’ estimates. The shares fell 0.3 percent to $32.80 at 12:34 p.m. in New York.
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