Rio Tinto Chief Sees China Boosting Copper Prices
TORONTO (Reuters) - Copper prices will rise from their recent lows in the short term, and long-term demand looks strong, partly because of solid and rising demand in China, Sir Robert Wilson, chairman of Rio Tinto Plc (RIO.L), one of the world's biggest copper producers, said on Tuesday.
"Low prices result from a very sharp decline in consumption that we saw in copper last year, pretty well the worst year-on-year decline that I can recall," Wilson told Reuters at a mining industry conference on sustainable development in Toronto.
"So we've got an old-fashioned surplus of copper, but that will work its way off in a relatively short period of time, provided that the recovery we're seeing in the global economy is indeed real and sustainable."
Three-month copper pushed up to $1,630 a tonne on the London Metal Exchange on Tuesday before drifting back to end the day's floor trade at $1,622 a tonne, up $12.50 from Monday's evening kerb close.
Copper was trading around $2,000 a tonne in mid-2000 and went down to around $1,350 a tonne last autumn.
The world's refined copper surplus in the first two months of 2002 soared to 198,000 tonnes from 15,000 tonnes in the year-ago period, the International Copper Study Group said on Tuesday.
Wilson said copper prices would start improving through this year and into next, particularly if the economic recovery maintains its momentum.
"Some of the underlying demand trends for copper are pretty strong," he said. "And, on a global basis, copper demand is rising very strongly in China.
"China is becoming such a big part of demand that a 10 percent increase in China is going to have a pretty big effect on the global equation. That didn't matter too much 10 years ago when China was pretty small. It looks to me as if China's demand is going to continue to rise quite rapidly."
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