UPDATE 1-Cochilco slightly lowers 2013, 2014 Chile copper output view

Thu Apr 4, 2013 10:50am EDT

Related Topics

* Cochilco keeps copper price forecast of $3.57/lb this year
    * Energy, grades, costs key issues to mining in Chile
    * Cochilco sees 2013 supply growth outpacing demand growth


    By Moises Avila
    SANTIAGO, April 4 (Reuters) - Chile will produce about 5.58
million tonnes of copper this year, up 2.6 percent from 2012, as
massive mining investment in the world No. 1 copper producer
pays off, the country's state copper commission Cochilco said on
Thursday.
    That is slightly down from Cochilco's January forecast for
5.59 million tonnes of output this year. 
    The Andean country is seeking to propel metal output from
its huge, ageing mines, but sliding grades, soaring costs, labor
unrest and energy woes could curb Chile's ambitious plans.
    Production is seen rising this year as leading copper miner
Codelco's new Ministro Hales mine comes on line at
the end of the year and previously problem-hit deposits recover.
    The Andean country's red metal output is seen climbing to
5.73 million tonnes next year, also slightly down from
Cochilco's previous forecast for 5.754 million tonnes.
    Enthusiasm surrounding a stronger productive year in Chile
has been somewhat tempered by a spreading port strike that has
blocked thousands of tonnes of copper in ports across the
export-dependent nation. 
    
    MARKET OUTLOOK
    Cochilco sees copper prices averaging $3.57 per pound this
year, unchanged from its previous estimate, before ebbing to
$3.32 per pound in 2014.
     Copper fell for the fifth straight session on Thursday,
hitting its lowest level in eight months and analysts said more
losses were likely as concern grew about high inventories and
weak global demand, especially in top metals consumer China.
 
    "While perspectives for demand and supply for 2013 and 2014
haven't changed substantially, there has to be a call to be
alert as the world economy is still showing signs of instability
and copper isn't immune to that," Mining Minister Hernan de
Solminihac told reporters. 
    World copper output should rise 3 percent this year, far
outpacing a 1.4 percent forecast rise in demand, Cochilco said.
    Antofagasta Minerals' CEO Diego Hernandez told
Reuters on Wednesday the equation between copper supply and
demand will remain tight this year, though production from new
mines and revamped ones may tilt the market into a surplus at
the end of the year.
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