- Copper set to average $6,330 a ton after 2018: says Cochilco
- China consumption may grow to 58% of global production
Chile, the world’s biggest copper producer, expects prices to increase by about a third over the long term because of rising demand from China, the top consumer.
Copper may average $6,330 a metric ton after 2018, Sergio Hernandez, executive vice president of the Chilean Copper Commission, or Cochilco, told reporters in Perth Tuesday. The metal, used in pipes and wiring, has risen about 8 percent since a low in January and traded at $4,667 a ton at 1:30 p.m. local time.
A shortfall of the metal should emerge later this decade, according to Rio Tinto Group, while Freeport-McMoRan Inc., the largest publicly traded copper producer, sees the market in deficit as soon as next year. China consumes about half of global copper production and that will increase to 58 percent within ten years, Hernandez said.
“Production does not have a lot of investment in comparison with demand,” said Hernandez, who forecasts prices will remain around current levels for the rest of the year, rising to an average $4,850 next year. “We have a high level of confidence about the increasing prices.”
Mining companies are racing to meet a forecast global deficit. Rio and its partners this month approved a $5.3 billion expansion to more than double output at the Oyu Tolgoi copper and gold mine in Mongolia. BHP Billiton Ltd. is studying a $2.2 billion option to expand its Spence operation in Chile to extend its life by about 50 years.