BHP Billiton does not expect depressed copper prices to lift for at least the next three years, but is confident in a comeback around 2019, when the market should start to shift into a “total under-supply situation”.
Copper prices have been languishing around six-year lows for much of this year, smashing Glencore’s share price and also putting pressure on copper majors BHP and Rio Tinto. Overnight on Tuesday, the price of copper – which is seen as a proxy for global economic activity – sank to a fresh six-year low of $US4590 a tonne.
Prices for BHP’s four key “pillar” commodities – copper, oil, iron ore and metallurgical coal – have taken a beating in 2015. The malaise in iron ore and coal was expected, but copper has dropped more sharply than most expected, and few predicted the dual collapse in oil and iron ore prices.
Vicky Binns, BHP’s vice-president of marketing for copper, told The Australian Financial Review in Singapore recently that despite production cuts and slowing demand from China, the market “looks pretty adequately supplied”.
“It’s pretty much the same until the end of the decade, because you’ve got quite a bit of new production that has been lagged going through,” she said.
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