Copper Production Falls to Seven-Month Low as Miners Cut Back
Lisbon, Feb. 11 (Bloomberg) -- Global copper production fell
to a seven-month low in November as companies such as BHP Billiton
Group and Phelps Dodge Corp. cut output or closed mines because
prices declined to a 14-year low, an industry research group said.
The Lisbon-based International Copper Study Group said output
fell to 1.108 million metric tons from 1.165 million in October.
The previous low was in April 2001, when output slid to 1.103
million tons, according to the ICSG.
Slowing economies in countries such as the U.S., Japan and
Germany have curbed demand for copper, used in tubing, wiring and
electronic products. Analysts expect the cuts will deepen in the
next few months as companies maintain their production cuts to
boost prices.
``In the December and January numbers you'll start to see
that trend increasingly, where those cutbacks will really begin to
bite,'' said Martin Squires, an analyst at J.P. Morgan Chase & Co.
Phelps Dodge, the second-biggest producer, has said it will
reduce annual production by 220,000 tons, or 16 percent, beginning
this year. Australia's BHP Billiton in November said it will cut
production by 170,000 tons a year and Rio Tinto Group has said it
is closing one of the two Kennecott Utah Copper Corp.'s
concentrate plants at a mine site in Utah.
Copper for delivery in three months was down $12, or 0.8
percent, at $1,590 a metric ton on the London Metal Exchange. The
price reached a 14-year low of $1,336 on Nov. 7 as a recession
curbed demand from consumers such as construction companies.
Including recycled scrap, total supply was little changed at
1.314 million tons from 1.313 million in October. Demand fell 3.3
percent to 1.205 million tons, leaving a surplus of 109,000 tons
of refined copper, the group said. Copper inventories monitored by
the LME are at 873,000 tons, a record in the 125-year history of
the exchange.
--Stuart Wallace in the London newsroom (44-20 7673-2388), or
swallace6@bloomberg.net with reporting by Joe Schneider in
Toronto. Editor: Foroohar, *Coulter |
