Gloomy Mining Chiefs See Copper-Tinted Light at End of Tunnel – by Firat Kayakiran, Jesse Riseborough and Agnieszka De Sousa (Bloomberg News – May 21, 2015)

The world’s biggest mining companies haven’t agreed on much lately as they argue about how to deal with a glut of iron ore and coal. When the subject turns to copper, however, they’re on the same wavelength.

Executives of BHP Billiton Ltd., Antofagasta Plc, Rio Tinto Group, Freeport-McMoRan Inc. and Glencore Plc all pointed to copper in comments this month as the one commodity not dogged by oversupply. Demand is proving resilient, according to analysts who cite China’s response to a slowdown in economic growth by sanctioning a number of previously delayed infrastructure projects.

“If you’re looking for a single structural long-term bullish argument for owning a commodity, just look at copper,” said Clive Burstow, who helps manage $44 billion at Baring Asset Management in London.

In an interview last week, the head of the world’s largest mining company painted a gloomy picture for the industry. BHP’s Andrew Mackenzie said that in all the minerals markets in which it operates, any demand increase can too “easily” be met by expanding existing mines. One exception he sees is copper.

The red-brown metal is used in pipes and wires in houses and appliances and is second only to silver as a conductor of electricity and heat. Last month, China’s imports of concentrate, a semi-processed ore from mines, rose about 4 percent from a year earlier after climbing to a record in March.

Price Jump

While copper is still far off its 2011 record of $10,190 a metric ton, prices have advanced 15 percent from this year’s low on Jan. 26. The metal traded at $6,173 a ton as of 5:17 p.m. in London.

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