Freeport Indonesia to process 400,000t of copper concentrate at new smelter
Earlier this month, Freeport obtained an export permit for the rest of the year from the government.
The Globe and Mail reports Chile’s state-owned copper giant Codelco which dwarfs other global producers of the metal has not seen the effects of a slowdown in China on its copper exports nor the prices it receives.
China is responsible for more than 40% of the global consumption of copper – the bellwether for the metals industry – and more than half of Chile’s exports end up in the country.
Chile’s deputy mining minister, Pablo Wagner, told the paper that exports should rise 5% – 6% in 2012 over last year and that “signs of demand, shipments and inventories, continue to be solid”:
Mr. Wagner predicted on Monday that prices will end, on average, between $3.50 (U.S.) per pound and $3.70 per pound this year, still well above the cost of production – ranging between $2 per pound and $3 per pound for higher-cost producers.
After Thursday’s bloodbath, copper futures were trending higher on Monday building on Friday’s modest gains with front-month contracts trading at $3.31 a pound.
The commodity which is and copper is now down more than 18% over the past year. The red metal hit historic highs at the end of July last year of a shade under $4.50 a pound (more than $10,000 a tonne).
Copper has found support from a surprise rate cut in China in early June – the first since the global financial crisis.
The world’s metal miners have become increasingly dependent on Chinese economic growth to keep profits and revenues flowing. In March, the Chinese government set a target of 7.5% growth for 2012, the lowest since 2004, but official figures showed first quarter 2012 numbers topping that at 8.1%.
3 Comments
Eggbert Woogleheim
Could it be that the Chinese find $10,000 a tonne for a metal that is a far better conductor and potentially much more useful than Gold ($60,000,000 approx) a tonne, who’s overall value is based merely on perception. Is it possible that China is stockpilling copper?
Biometalix2000
Copper purchases are tied to China’s 5YR urbanisation plan, announced earlier this year. Meaning China wants to build 100 or some 1M population cities in the next few years. Hence the buying like crazy mentality.
When China decides to go into luxury and high quality goods manufacturing seriously, they will buy Gold like there is no tomorrow. Because , you can get a quality better product with Gold wiring.
Frick Els
Gold is a far superior conductor to copper, it is only used in high end industrial requirements (for example the space shuttle contains 40kg of gold) due to its cost.