Southern Copper Corp - a subsidiary of Grupo Mexico - said on Tuesday it expects average copper prices of $3.25 per pound in 2010, as it expects demand to be boosted by emerging and developed economies.
The price of copper rose 140 percent in 2009 on strong Chinese buying and supply concerns, but fell 8.5 percent in January as rising inventories suggested demand outside China was weak. Current price is a little over $3 a pound.
"We believe that inventories of copper will start to die off during the year, reversing the last month's trend," Southern Copper's Chief Financial Officer Genaro Guerrero said on a conference call with buying from emerging economies like China supporting prices through this year. Mr Guerrero also said that he expected consumption to rise in developed countries.
Southern Copper estimates copper production for this year at 500,000 tonnes, slightly above the 485,376 tonnes it mined this year, with molybdenum production forecast at 18,500 tonnes, in line with last year's output. Zinc sales this year are expected to be around 110,000 tonnes and silver sales to come in near 16 million ounces.
The company's 2010 copper forecast does not include potential output from the Cananea copper mine in Mexico, which usually produces around 20 per cent of the company’s copper but which has been closed by a strike for two years. The company was not able to give an estimated date for production to re-commence at Cananea.
Earlier this week copper trader Mr David Threlkeld said he expected the price of copper to plunge to around $1 a pound as he believed there to be much higher inventories than have been reported.
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