Codelco, a Chile-based major global copper producer says it foresees low copper demand while producers resume operations of mines shut down during last year’s financial crisis.
Codelco executive president and CEO Jose Pablo Arellano said worldwide production will surpass global demand this year and in 2010.
Speaking to Bloomberg, Arellano said that compared to earlier quarters demand will be lower, as increasing prices for copper used in wiring and plumbing prompt companies to open closed mines and draw more scrap metal to the market.
According to International Copper Study Group (ICSG), global copper output will surpass demand by 370,000t in 2009 because of less copper purchases outside of China. The surplus could increase to 540,000t in 2010, the ICSG said.
Copper prices increased twice this year as China, which consumes 33% of global supply, increased infrastructure expenditure on bridges and roads.
Codelco says plans to bolster production by 150,000t this year as it is keen to stop four years of declining output.