Sumitomo Metal Mining Company, Japan’s second-largest copper smelter, believes that copper will be in short supply for at least half a decade, reported Bloomberg News Wednesday.
Falling production of copper ore in Chile and Indonesia, high demand in growing Asian economies and some safety concerns will cut into the supply of ore, according to the firm’s president, Nobumasa Kemori.
“It’s a seller’s market for concentrates and I don’t think this will change before 2014 or 2015…We don’t want to increase output with raw material sourced from the spot market,” Kemori told Bloomberg News.
Copper futures surged on Wednesday, rising 3.03 percent to trade at 347.2 cents per pound of refined metal. However, processing fees for the smelting of ore into copper have dropped, making some smelters less enthusiastic about increasing production.
Barclays Bank projects that the cash price for copper will average nearly $7,000 per ton on the London Metal Exchange during the fourth quarter, reported Bloomberg; currently, copper for delivery in three months trades at about $7,585 per ton on the LME.
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