Daily Management Review

World’ Top Copper Producer Chile Slashed Output Forecast.


The biggest producer of copper across the world is anticipated to produce 5.94 million tonnes of copper in the year 2015.

World’s leading producer and exporter of copper, Chile has revised its output forecast downward for the red metal copper from 6.0 million to 5.94 million tonnes for the year 2015. Despite huge cost cuttings from past few years, major copper miners including BHP Billiton are witnessing losses. Recent floods are the crucial factor that dragged the production forecast downward. Moreover, lower assessment of projects operated by Anglo American and Zaldivar mines, run by Barrick Gold also led to a decline in output projection.

Heavy rainfall has temporarily stopped the operations majorly at JX Nippon's Caserones and Codelco's Salvador. The copper prices are hovering around its five-year lows and the copper miners are struggling with declining demand from China, world’s largest consumer of copper. The metal is considered as one of the vital indicator of global economic strength by investors. With the slump in China’s real estate sector, the copper prices declined steeply this year. This resulted in creating substantial pressure on the copper producers across the globe. As a result, world’s biggest producer of copper, Freeport McMoRan declared that it would slash its dividend for the first time in past 7 years.

The red metal is utilized in varied range of industries from automobile manufacturing to construction sector. In contrast to iron ore, copper market is not experiencing excessive supply conditions. According to the analysts, the red metal is persistently controlled on supply side and hence forecast, modest copper supply in 2015. The supply glut in copper market is not likely to arise in the near future.
Chile’s state run company, Codelco that accounts for almost 8% of global copper production is planning to cut its costs at the Salvador mine. The company is trying to restarts its operations after a halt in production that was led by torrential rains. Codelco has an ambitious plan to reduce its costs by $1 billion by 2015 end.

The plunging crude oil prices have saved the fuel costs incurred at active mines that run series of trucks. Besides the weak Chile’s currency has further softened the costs Chile’s copper miners. Despite drastic cut down in the overall costs of production, the copper prices are not moving in favour of the miners. The cost reduction plans by the producers accelerated during the first quarter of 2015, which in turn relieved the pressures on margins.

Since 2011, the copper prices have plummeted 40%, mainly dragged by soaring US dollar and slowdown in China’s economy. China, being the leading copper consumer accounts for almost 40% of worldwide copper purchases. However it is believed that the growth in US economy and recovery of European Union will fuel the copper prices. Unforeseen events have halted copper productions thereby causing disruption in the supply of red metal. It will be however difficult for the copper producers to fill the gap for the lost time. Moreover, the deceleration in the growth of China, world’s biggest consumer of commodities is fuelling concerns of shrinking residential, construction and manufacturing activities that empowers China’s demand for copper.

Tags : Chile

Science & Technology

NASA’s Mars Mission To Make Use Of Cold War-Era Atomic Rockets

Israel Completes Mars Habitat Simulation Experiment

Just $24 Earned By Hackers From The Huge Cryptojacking Campaign Conducted Last Week

New Molecule That Quickly Fights Cancer Cells Identified By Swedish Scientists

The U.K.’s Health Sector To Integrate Israeli ‘Digital Health’ Technology

Cryptocurrency Mining Malware Infects Government Websites In Multiple Countries All Across The World

New Research Into Space Settlement And Space Habitation Will Be Supported By Seed Grants Launched By UAE

NASA Confirms Mystery Satellite To Be Its IMAGE Satellite

Facebook To Put A Ban On Cryptocurrencies Ads

Study Show An Early Sign For Alzheimer's Is Sleep Disruption

World Politics

World & Politics

Australia To Welcome Britain On The Latter’s Interest In Joining TPP

South African President Zuma Finally Resigns, New President To Be Elected Soon

13 countries with the best healthcare system

France is coming closer to Iran

India-Russia Develops Supersonic Missile Which Could Raise Concerns In China

Yet another serious political risk for Europe: Italian elections coming soon

Seven Weeks Time Period , Says Theresa May, For Agreement On Brexit Transition Deal

Germany on the brink of political chaos