Codelco, the world’s biggest copper producer, said that a global surplus will persist through this year and next, and dismissed suggestions that a recent gain in prices was likely to endure.
The metal will probably fluctuate at around $2 to $2.10 a pound for a couple of years, with extreme volatility, Chairman Oscar Landerretche said in an interview in Florida. After the gluts this year and in 2017, the market may swing to a deficit of 50,000 to 100,000 metric tons in 2018, with the shortfall expanding to 300,000 to 400,000 tons in 2019, he said.
Copper has rebounded from a six-year low in January after sinking 25 percent last year as slowing growth in China hurt demand in the largest user and spurred a global surplus.
The rout forced miners including Santiago-based Codelco to rein in costs, while others such as Glencore Plc shuttered mines to curb supply. Glencore Chief Executive Officer Ivan Glasenberg said Tuesday that he now sees commodity prices bottoming.
Those in the market who believe that copper will rise above $3 a pound “must have some secret information that we’re not aware of,” Landerretche said Tuesday from a mining conference. “It doesn’t look very plausible.”
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