Cochilco predicts $3.10/lb copper in 2008

Chilean forecast is higher than consensus average

By Maria Varmazis -- Purchasing, 1/9/2008 10:33:00 AM

Cochilco, Chile’s state copper commission, forecasts the 2008 world copper price to average $3.10/lb, slightly higher than the market consensus copper price of $3.03/lb. The world copper price in 2007 was $3.23/lb.

 A Reuters report quotes Cochilco’s executive vice president Eduardo Titelman suggesting that the copper market would remain tight in 2008, with demand of some 18.4 million metric tons versus output of 18.5 million. For 2009, Titelman sees copper prices likely remaining high, around $2.70/lb.

In addition to its price forecast, the commission also forecast that Chile will produce 5.7 million tons of copper this year. This number is higher than 2007’s output as Cochilco looks to new mines to increase overall capacity, though not enough to offset a global demand that still outpaces supply.

Titelman still believes overall supply of copper will reach 18.4 million tons this year, just falling short of a predicted 18.5 million tons in global demand, especially from China. He projected as far back as November that copper ore supply would stay tight in 2008 with high prices as the market remains vulnerable to mining disruptions.