By Carolina Curiel (ScrapMonster Author)
April 28, 2016 05:10:35 AM
SANTIAGO (Scrap Monster): The Chilean Copper Commission (Cochilco) has maintained its price forecast for 2016 at $2.15 per lb. In its latest report published yesterday, the agency noted that Chile’s copper production is likely to total 5.77 million tonnes in 2016. The prices are likely to average at $2.15 per lb during the current year. The state copper commission also kept its 2017 price forecast unchanged at $2.20 per lb.
The 2016 price forecasts were kept unchanged despite fears of slower demand growth by many top copper consuming nations including China. Cochilco noted that the scrap supplies are likely to dry up going forward, which in turn may lend support to copper price.
The global copper demand growth prospects have been lowered when compared with the forecasts provided during end-January this year. The demand forecast for 2016 has been downgraded from 2.3% to 1.8%. The global copper demand is likely to total 23.151 million mt during 2016. The fall in global demand is mainly on account of anticipated weaker demand from China- the top copper consuming nation in the world. According to Chilean Mines Minister Aurora Williams, the Chinese copper demand growth for 2016 and 2017 has been cut from 3% to 2.5%. Also, the global demand forecast for 2017 has been lowered from 2.6% to 2.1% to total 23.645 million mt.
Meantime, global copper mine production is expected to rise by 5.1% in 2016 to 20.25 million mt. The mine production will grow further by 2.9% in 2017. Major producers including Peru, Mexico and Indonesia are likely to report increased mine output during the year. However, the increased mine production by these countries will be offset by a sharp drop in secondary copper output from scrap. The secondary output is likely to decline by nearly 4% to nearly 3.6 million mt during the year.
Cochilco has reduced the global refined copper surplus from 198,000 mt forecast in January to 140,000 mt. The forecast for 2017 has been lowered sharply from 168,000 mt to 92,000 mt.