SYDNEY, Feb 08, 2011 (Dow Jones Commodities News via Comtex) -- Demand for copper shows little sign of flagging as the metal hovers around record levels, the Chief Executive of South Australia-based copper-gold miner OZ Minerals Ltd. (OZL.AU) said Wednesday.
"We don't really see a level" at which copper becomes so expensive that consumers start to substitute lower-cost materials, Terry Burgess said on a conference call after the company's annual results.
"You're still not seeing the supply side being fully met. We continue to read about delays in (mining) operations, projects not coming into production as soon as expected," he said.
The market is unlikely to come back into balance until large numbers of new projects start up, he said.
Three-month copper futures on the London Metal Exchange hit an intraday record of $10,160 a metric ton Monday, putting the metal at nearly four times the price of aluminum.
LME three-month copper closed yesterday at $10,060/ton, while aluminum ended at $2,565/ton.
Based on a rule of thumb in the metals markets, consumers will start substituting aluminum for copper whenever the copper-aluminum price ratio rises above 2.5-3.0.
OZ's Prominent Hill mine produced 112,171 metric tons of copper in 2010, equivalent to around 0.7% of the world's 2009 mined copper output, which the International Copper Study Group puts at 15.4 million tons.