Santiago, Chile 03/04/2016 - Cesco Week, now firmly established as a key annual event in the global copper industry, officially kicks off on Monday but FastMarkets' reporters have been in Santiago for several days collecting quotes from market experts.
CESCO SENTIMENT
"There are fewer people here this year. It is hard to justify the expense to travel to Chile in a tough price environment. There is definitely a sense that things are smaller" - analyst
"Will Cesco Chile continue to be a must-attend? It's uncertain as the focus has shifted to Asia. With Cesco now in Shanghai and taking place at key negotiating times, it seems that the glory days for Chile are ending" - industry consultant
“This is a a year where people are going to be very conservative. If I had to label things, I would say Cesco Week will be neutral to slightly negative" - Canadian miner
"The mood was bleak at the start of the year but everyone has tightened their belts. People have had time to adapt and are now getting on with things" - a trader
"I like that Cesco takes place when the market is quiet. I can concentrate on relationships because I don't have to agree business deals. Relationships in Chile is what makes business." - a miner
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THE LOW COPPER PRICE
"The $5,000 [per tonne] level is now seen as good. Will things get worse? It is tough to tell. We may see further downside but most likely we will just grind along for the time being. But the longer prices are lower, the more it hurts miners" - analyst
"The price is low but I don't think it will get worse. Currencies [in most mining regions] are underperforming, which allows producers to keep running even when copper prices are low" - mining specialist
"We are at a level where things are tough but I think the worst is behind us. I do not think it will go much lower - there is alway an upside even when things are bleak" - logistics expert
"Funds are still bearish but they got burnt by the recent move higher. They may be more cautious in the future" - fund analyst
"I don’t see any reason for the price to go down. It could move a couple of hundred bucks in either direction but the bias will be higher. Many projects have been put on hold and that will impact supply. [Also,] the Chinese smelters are increasing capacity at a slower rate" - Stefan Boel at Aurubis
"We're preparing for a bear market. There is going to be a lot volatility in the next two years and maybe beyond, where we could see prices bounce between $1.80 and $2.20 per pound" - Anglo American's Hennie Faul
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MINERS IN SURVIVAL MODE
"Right now everyone in the industry is in survival mode - they are just trying to make the best of a bad situation" - Canadian miner
"If there's no improvement then the landscape of the mining industry could totally change. Capex is being restricted and miners are reluctant to cut production. If prices continue to bump at these levels or lower, some big names could be wiped off the map" - analyst
"People are already making small decisions on a daily basis that will eventually add up to big cuts. For example, I'm sure there plenty of mines that aren't going to strip steep faces because it's too costly. Cost is the number one factor when developing a mine" - miner
"Miners would rather lose cash and still operate with a limited cash flow -they want to survive for as long as possible" - Trader
"Everyone is in the same boat. It is no longer a case of if it is going to hurt; it is now a case of how long the pain will last. But in the short term things do not look good" - Chilean miner
"What we've seen is that everyone considers copper to be one of the pillars of their business. We haven't seen too many opportunities in the market and the ones that are out there imply a long-term price that is higher than the consensus. I'm not too optimistic about the likelihood of finding good opportunities." - Diego Hernández at Antofagasta.
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EXCHANGES
"Copper is a metal where there is a larger amount of non-physical participation and we welcome that. We do not think that it pushes prices around in a way that different market users may not like. Actually, we think what happens improves liquidity and therefore narrows bids and offers and provides more trading opportunities" - LME chief operating officer Stuart Sloan
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RAMPING UP PRODUCTION IN PERU
"Production in Peru is doing really well but a lot of mines are ramping up output at the same time. And they're all sending their concentrates to the Port of Matarani. That's going to put a lot of stress on those road and rails. I could envision there being major issues with the local communities if those trucks cause congestion and dust" - miner
"The [local Peruvian] communities will continue to be an issue - one that is made more acute by the upcoming election. And there's a shortage of truck drivers. These are growing pains but they will be solved over time" - South American miner
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COPPER TC/RCs BENCHMARK
"I really think the benchmark needs to die. The main issue is the China Smelter Purchasing Team (CSPT), which has become much better organised over the last couple of years. And that's the problem - they are are now much better placed to play with price structure" - miner
"The benchmark can lead to laziness in the market - there is a lot more to our business than just TC/RCs. There are also payment terms, penalty items, logistical costs and other value propositions. I do not think this sole focus in the TC/RC benchmark is a good thing" - copper miner