Antofagasta Cuts Copper Surplus Figure on Mine DelaysThomas Biesheuvel
Antofagasta Plc cut its forecast for a surplus in the global copper market this year by almost two-thirds after delays in setting up new mines in the industry.
“We expected to have a surplus of around 400,000 tons of copper by the end of the year, today we believe that will be reduced to 150,000,” Diego Hernandez, chief executive officer of the producer controlled by Chile’s Luksic family, said today.
There will be a “small surplus” in 2015 before the market starts to balance in 2016, Hernandez told reporters on a call. “From 2016 on the balance should be quite tight. We’re cautious on the short-term, but optimistic on the medium-to-long term.”
Miners are battling excess supply that’s depressed prices. Combined with rising costs, that has eroded earnings. Average prices for three-month delivery in London declined 9 percent to $6,888 a metric ton in the first half from a year earlier.
Antofagasta’s first-half net income dropped 16 percent to $330.8 million, the London-based mining company said today in a statement. Sales slid 4.2 percent to $2.67 billion.
Net cash costs, including earnings from by-products such as molybdenum, climbed 16 percent to $1.46 a pound of copper in the first half, the company said July 30. It targets $1.45 a pound for the year. Antofagasta reiterated its annual copper output goal of 700,000 tons after production sank 4.4 percent to 348,200 tons in the first half.