Copper Shortfall Likely to Remain in 2012, OZ Minerals Says
Copper supply shortages, which have been driven by operational problems and labor strikes in South America and Indonesia, are likely to persist next year, said OZ Minerals Ltd. (OZL) Australia’s third-biggest producer by market value. “A shortfall in 2011 is certainly something that wasn’t expected at the beginning of the year and you’re going to see this shortfall flowing to 2012 as well,” Terry Burgess, chief executive officer of the Melbourne-based company, told Rishaad Salamat today on Bloomberg Television’s “On the Move Asia.” Copper may be set for a “strong rally” in the second quarter of next year amid an expected deficit of the metal, Goldman Sachs Group Inc. said this week. Copper in New York climbed to a record $4.6575 a pound in February.“I see strength in the copper price as China and India continue to urbanize,” Burgess said. “We’re not seeing any major new projects coming in until maybe 2014 and 2015 with Oyu Tolgoi in Mongolia.”
Copper futures in New York rose 0.2 percent to $3.29 a pound at 2:30 p.m. Sydney time. Burgess said he sees the long- term price at about $2.50 a pound.
Barclays Capital this week raised its estimate for this year’s market deficit to 536,000 tons. Freeport-McMoRan Copper & Gold Inc. (FCX), the world’s largest publicly traded copper producer, has suspended processing ore for shipment since Oct. 22 at the Grasberg complex, where as many as 8,000 workers have been on strike since September demanding higher wages.
Global Demand
“There are operational problems on mines and in particular we’ve seen a lot of strikes in South America, and most recently Grasberg in Indonesia and as a result of that there’s this shortage of copper in general in the market,” Burgess said.
Global demand for the metal is set to climb at least 4 percent annually through 2015, John MacKenzie, Anglo American Plc (AAL)’s head of copper, said this week.
New York copper has tumbled 20 percent in the last six months on concern that the debt crisis in Europe and a slowdown in China and U.S. will damp demand.
“Obviously the volatility that we’re seeing in recent times is more dependent on the global economy, particularly with what’s happening in Europe and I think that volatility is spreading over to the other commodity prices,” Burgess said.
To contact the reporter on this story: Soraya Permatasari in Melbourne at soraya@bloomberg.net
To contact the editors responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net; Andrew Hobbs at ahobbs4@bloomberg.net
Copper futures in New York rose 0.2 percent to $3.29 a pound at 2:30 p.m. Sydney time. Burgess said he sees the long- term price at about $2.50 a pound.
Barclays Capital this week raised its estimate for this year’s market deficit to 536,000 tons. Freeport-McMoRan Copper & Gold Inc. (FCX), the world’s largest publicly traded copper producer, has suspended processing ore for shipment since Oct. 22 at the Grasberg complex, where as many as 8,000 workers have been on strike since September demanding higher wages.
Global Demand
“There are operational problems on mines and in particular we’ve seen a lot of strikes in South America, and most recently Grasberg in Indonesia and as a result of that there’s this shortage of copper in general in the market,” Burgess said.
Global demand for the metal is set to climb at least 4 percent annually through 2015, John MacKenzie, Anglo American Plc (AAL)’s head of copper, said this week.
New York copper has tumbled 20 percent in the last six months on concern that the debt crisis in Europe and a slowdown in China and U.S. will damp demand.
“Obviously the volatility that we’re seeing in recent times is more dependent on the global economy, particularly with what’s happening in Europe and I think that volatility is spreading over to the other commodity prices,” Burgess said.
To contact the reporter on this story: Soraya Permatasari in Melbourne at soraya@bloomberg.net
To contact the editors responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net; Andrew Hobbs at ahobbs4@bloomberg.net
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