CESCO ROUND-UP – The complete list of every FastMarkets story from Chile

Cesco Week was bearish this year but market participants have also come to accept the weak conditions and are ready to get to work on solutions.

For chatter from conference halls, the sidelines, the parties and dinners please click here, here and here.

Goldman Sachs not only still believes that copper will fall below $4,000 per tonne but the US bank is now saying that might be the best case.

Chilean producer Codelco is managing the current uncertainty and low copper prices by aggressively cutting costs and delaying some capital expenditures until improved fundamentals kick in later this decade, CEO Nelson Pizarro said.

Billionaire Warren Buffett once famously noted that “only when the tide goes out do you discover who’s been swimming naked”. This is certainly the case with the copper industry, where the debt-funded super-cycle has been unceremoniously replaced by a long-term bear market.

Consultancy firm CRU forecasts global copper demand to remain barely in positive territory this year, Vanessa Davidson, director of copper research and strategy, said.

Consultancy CRU sees difficult conditions in the copper industry, with lacklustre Chinese physical demand and a contraction in global mine production this year, CRU CEO Nick Morgan said to kick off its World Copper Conference.

The pace substitution of aluminium and plastic for copper should slow as many of the easy applications have already been implemented, Mark Lovett, secretary-general of the International Wrought Copper Council (IWCC), said.

The burgeoning Chinese middle class will ensure exponential growth in the generation of domestic scrap, which will change trade flows and require massive investment, Michael Lion, president of Lion Consulting Asia, said.

Global resources giant Anglo American said that the global copper market will likely be over oversupplied for the next several years, nevertheless, the company is confident that it is well positioned to ride out the storm with its two Tier 1 mines.

Anglo American has no plans to sell its top copper mines including Los Bronces, Hennie Faul, head of Anglo’s copper business, said.

Copper optimists are few and far between at this year’s Cesco Week but Benjamin Cox, president and CEO of junior miner Aston Bay Holdings, believes that people should put aside the short-term noise and look at the bigger picture.

Chilean miner Antofagasta is not expecting a big wave of mine acquisitions in the near future, because companies are unwilling the divest of their cherished copper assets even during this low price environment, Antofagasta CEO Diego Hernández said.

Global copper miners have reacted to low prices by aggressively cutting costs, which might lead to an uptick in supply disruptions, market experts said.

The copper price is expected to be mostly stable for the rest of this year and a drop to $4,000 per tonne is unlikely as the refined market is mostly balanced, Aurubis executive Stefan Boel told FastMarkets in an interview.

The copper price will average $4,850 per tonne in 2016, pressured lower by another year of overcapacity and China’s transition towards a consumption-based economy, Thomson Reuters-GFMS said.

The backwardation in the LME copper forward curve has started to ease in anticipation of more material arriving in listed warehouses, market participants said.

Europe’s biggest copper smelter Aurubis is looking to expand its footprint via global acquisitions, executive Stefan Boel told FastMarkets in an interview.

Spot copper treatment and refining charges (TC/RCs) should rise in the second half of this year amid a slowdown in Chinese smelter expansions and the presence of more clean concentrate, Aurubis executive board member Stefan Boel said.

The copper industry could consolidate quickly as weak prices continue to impact miners, many of whom are carrying large debts, market participants said.

Undependable data from China continues to be a major problem that muddles investors’ impressions of real copper fundamentals, Matthew Wonnacott, senior consultant at CRU, said here today.

Peru will become the world’s second largest copper producer within the next five years, Votorantim Metals CEO Tito Martins told delegates.

Paranapanema SA has remained profitable during Brazil’s deep recession by increasing its exports and processing more complex concentrates, president and CEO Christophe Akli said

Will Adams

About Will Adams

William Adams has been involved in the metals markets since 1982 – he has experience in many areas of the market from researching to trading and has worked in London, New York and Tokyo.