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China Demand Driving Copper Prices, Southern Says (Update1)
May 4,2010 08:43CST
industry news

May 3 (Bloomberg) -- Copper prices will rise on Chinese demand this year, Southern Copper Corp.'s Financial Planning Manager Raul Jacob said.

Southern, which is slated to produce 500,000 metric tons of copper in 2010, doesn't expect any production this year from its shuttered Cananea mine as it waits for Mexican authorities to clear a union blockade, Jacob said today on a conference call. Silver sales will total 16 million ounces this year, he said.

"Emerging markets led by China will give support for copper prices for the rest of 2010," Jacob said. "Silver prices will also remain strong due to investor demand and inflation fears."

Copper has jumped 56 percent during the past 12 months as demand for the metal used to make piping and wires cut London Metals Exchange inventory to the lowest level since Dec. 30.

Futures for July delivery fell 1.9 cents, or 6.5 percent, to $3.289 a pound on the Comex in New York at 12:23 p.m.

Southern Copper dropped 85 cents, or 2.8 percent, to $29.73 at 1 p.m. in New York Stock Exchange composite trading. The stock has jumped 57 percent in the past year.

Grupo Mexico SAB workers at the Cananea copper mine, the world's largest deposit of the metal, have been striking on and off for about three years. Southern Copper is the unit that accounted for 63 percent of Grupo Mexico's first-quarter revenue. Grupo Mexico is based in Mexico City.

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