Chinese copper demand has been so strong in the past few months that top producer Codelco has almost sold out of supplies for next year, well ahead of schedule, according to the chairman of the Chilean state-owned company.
“It’s extremely strong, not only China. It’s extremely strong around the world,” Juan Benavides, who took over as chairman of Codelco in May, said in an interview in London. The wave of buying comes as prices have fallen 15 percent this year amid fears that a trade war between the U.S. and China could stifle global growth.
“The trade war is not good at all,” but “demand is strong, inventories are low, supply is not growing as much as demand,” he said. He sees prices rising above $3 per pound ($6,612 a ton) as demand outpaces supply. Futures are trading at about $6,218 a ton on the London Metal Exchange Tuesday.
Mining companies and investors are increasingly bullish on copper because of limited supply and falling global stockpiles. Codelco has locked in copper-cathode supply contracts with European buyers at a premium of $98 a metric ton over benchmark prices, the highest since 2015. Premiums for contracts signed this year with clients in China and the U.S. are also up by 15 to 17 percent.
This year’s sales are “amazingly good,” said Codelco Vice President Roberto Ecclefield. “It’s the first time you see China, the U.S., and the Europeans very strong.
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