Anglo American Says Copper 'Vulnerable' to Surprises (Update3) -Shanghai Metals Market

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Anglo American Says Copper 'Vulnerable' to Surprises (Update3)

Industry News 08:45:15AM Apr 09, 2010 Source:SMM

April 8 (Bloomberg) -- Copper, which fell from a 20-month high this week, may be "vulnerable" if China slows purchases, said the head of Anglo American Plc's copper business.

Prices, which more than doubled in 2009, indicate the market expects demand to keep rising from China, Anglo American's John MacKenzie said today in an interview in Santiago. The London-based company is the world's sixth-largest copper producer.

"That's obviously vulnerable to economic surprises," he said. "Those could come out of China, those could come out of the U.S. or out of Europe."

Copper fell for a third straight day today on concern that Greece's fiscal difficulties may curb European expansion. "There's no assurance" about the timing and extent of recovery in the developed world, meaning prices are driven by China, Richard Adkerson, Freeport McMoRan Copper & Gold Inc.'s chief executive officer, said in an interview yesterday.

Copper demand is rising more than the world's biggest producer, Codelco, expected this year as Chinese consumption remains "vigorous," Chief Executive Officer Jose Pablo Arellano said yesterday at a copper conference in Santiago.

Price Volatility

Anglo American predicts copper demand will continue to rise in the long-term, boosted by demand from China and economic growth in other emerging markets, MacKenzie said. Prices may be "volatile" for the next 18 months, he said.

Copper futures for May delivery tumbled 1.1 cents, or 0.3 percent, to $3.5865 a pound on the Comex in New York.

The Chinese government will take more measures to rein in property prices, hedge fund manager James Chanos said in an interview on "The Charlie Rose Show" that will air on PBS and Bloomberg TV.

China's property market is a bubble that may burst by as early as this year, Chanos said. The world's third-biggest economy may need to keep up the pace of property investment because as much as 60 percent of its gross domestic product relies on construction, he said.

China is "on a treadmill to hell," said Chanos, the founder of Kynikos Associates Ltd. "They can't afford to get off this heroin of property development. It is the only thing keeping the economic growth numbers growing."

Chile, Peru Projects

Anglo American plans developments in Chile and Peru to meet rising demand from emerging economies, MacKenzie said. Anglo American along with Xstrata Plc, Rio Tinto Group and Southern Copper Corp. are looking to build new copper mines in Peru.

Anglo American sees "huge potential" to combine the San Enrique Monolito, Los Sulfatos and Los Bronces mines in central Chile into a "mega mine," MacKenzie said. Last year discoveries in the area added 2.1 billion tons to Anglo American's copper resources, he said.

"There's no doubt that one day that will be developed as one of the world's great copper mines," he said.

The world's biggest copper producers are Codelco, Freeport McMoRan, BHP Billiton Ltd., Xstrata and Rio Tinto.
 

Key Words:  copper Cu  copper price 

Anglo American Says Copper 'Vulnerable' to Surprises (Update3)

Industry News 08:45:15AM Apr 09, 2010 Source:SMM

April 8 (Bloomberg) -- Copper, which fell from a 20-month high this week, may be "vulnerable" if China slows purchases, said the head of Anglo American Plc's copper business.

Prices, which more than doubled in 2009, indicate the market expects demand to keep rising from China, Anglo American's John MacKenzie said today in an interview in Santiago. The London-based company is the world's sixth-largest copper producer.

"That's obviously vulnerable to economic surprises," he said. "Those could come out of China, those could come out of the U.S. or out of Europe."

Copper fell for a third straight day today on concern that Greece's fiscal difficulties may curb European expansion. "There's no assurance" about the timing and extent of recovery in the developed world, meaning prices are driven by China, Richard Adkerson, Freeport McMoRan Copper & Gold Inc.'s chief executive officer, said in an interview yesterday.

Copper demand is rising more than the world's biggest producer, Codelco, expected this year as Chinese consumption remains "vigorous," Chief Executive Officer Jose Pablo Arellano said yesterday at a copper conference in Santiago.

Price Volatility

Anglo American predicts copper demand will continue to rise in the long-term, boosted by demand from China and economic growth in other emerging markets, MacKenzie said. Prices may be "volatile" for the next 18 months, he said.

Copper futures for May delivery tumbled 1.1 cents, or 0.3 percent, to $3.5865 a pound on the Comex in New York.

The Chinese government will take more measures to rein in property prices, hedge fund manager James Chanos said in an interview on "The Charlie Rose Show" that will air on PBS and Bloomberg TV.

China's property market is a bubble that may burst by as early as this year, Chanos said. The world's third-biggest economy may need to keep up the pace of property investment because as much as 60 percent of its gross domestic product relies on construction, he said.

China is "on a treadmill to hell," said Chanos, the founder of Kynikos Associates Ltd. "They can't afford to get off this heroin of property development. It is the only thing keeping the economic growth numbers growing."

Chile, Peru Projects

Anglo American plans developments in Chile and Peru to meet rising demand from emerging economies, MacKenzie said. Anglo American along with Xstrata Plc, Rio Tinto Group and Southern Copper Corp. are looking to build new copper mines in Peru.

Anglo American sees "huge potential" to combine the San Enrique Monolito, Los Sulfatos and Los Bronces mines in central Chile into a "mega mine," MacKenzie said. Last year discoveries in the area added 2.1 billion tons to Anglo American's copper resources, he said.

"There's no doubt that one day that will be developed as one of the world's great copper mines," he said.

The world's biggest copper producers are Codelco, Freeport McMoRan, BHP Billiton Ltd., Xstrata and Rio Tinto.
 

Key Words:  copper Cu  copper price