(Bloomberg) -- The world’s largest copper miner has a word of advice to the bears in the market: the downtrend in prices won’t last long.
While the metal headed for its biggest weekly loss since November after weaker factory gauges in China and the U.S. fueled demand concerns, those fears weren’t grounded on fundamentals, Codelco Chief Commercial Officer Roberto Ecclefield said. He forecast 2.3 percent growth in consumption this year just as mine production is seen slipping 0.5 percent, while smelter output remains flat.
The Chilean state-run miner has been receiving requests from traders and customers who want to buy additional supply of refined copper for the second half of this year and next year, Ecclefield said. The physical market remains stable, with premiums paid by buyers for the refined metal staying above $60 per ton, he said, without providing a comparative. Only low-quality cathodes have lower premiums, driven by the liquidation of a Chinese trader, he said.
“Copper prices are being impacted by the financial sector’s view that there are risks that could impact global economic growth over the long term," Ecclefield said by phone on Thursday.
Supply disruptions, including rains in Chile and protests in Peru kept the market in deficit, even as demand for so-called concentrate, or the semi-processed ore, eased up as a result of a four-month stoppage at two of Codelco’s four smelters, Ecclefield said. New smelter capacity in China means increasing competition for concentrates, he said. Codelco expects shortages to worsen in the second half of the year, with less copper concentrate in the market and more smelting capacity available.
Copper prices steadied near a two-month low on Friday, halting a sharp weekly slide. The metal for three-month delivery gained 1.2 percent to $6,240 a metric ton at 2:46 p.m. in London.
(Updates with copper price in final paraghraph.)