Metal Bulletin - By Danielle Assalve
Sao Paulo 13/10/2016 - Chile’s annual copper mine production is set to fall 3.9% in 2016 from last year, mostly affected by lower volumes from BHP Billiton’s Escondida mine, the country’s copper commission, Cochilco, said
Output is now expected to total 5.4 million tonnes, down from 5.76 million tonnes produced in 2015, Cochilco said on Wednesday October 12.
This decline is greater than the 0.5% production fall estimated by Cochilco three months ago and a swing form the 0.1% increase forecast in April.
Cochilco attributed the fall in mine production to lower output from Chile’s largest mine, Escondida. In the first eight months of 2016, Escondida's production fell 20% year-on-year, to 685,400 tonnes.
Cochilco has also revised down Chile’s likely production in 2017 to 5.85 million tonnes. The commission’s previous forecast was for output of 5.92 million tonnes in 2017.
Cochilco maintained its estimated copper price at $2.15 per lb (about $4,740 per tonne) in 2016 and $2.2 per lb (about $4,850 per tonne) in 2017.
This reflects the lack of a “significant recovery in China’s copper demand” and the absence of “relevant structural changes in the copper market, which is balanced, with a small surplus expected for 2016 and 2017”, according to Cochilco.
Cochilco has now lowered its estimate for a global surplus to 128,000 tonnes of copper in 2016 and to 114,000 tonnes in 2017. These are representative declines of 48,000 tonnes and 32,000 tonnes from its previous forecast.
The projected surplus “equals about two days of global copper consumption, which makes it reasonable to consider the market in balance”, Cochilco’s studies and public policies director, Jorge Cantallopts, said.