Major copper producers say prices for the key industrial metal will likely remain strong at least for the remainder of 2010 as emerging markets demand continues to hold firm.
Rio Tinto (RIO,) and Chilean giant Codelco (not traded in ADR form) have separately confirmed that as far as they can tell, demand for copper should persist at levels slightly more robust than what the industry can currently supply. In fact, RIO in particular estimates that the global copper industry will need to come up with the capacity to produce another 6 million tons of copper over the next 10 years, and that about half of that capacity will come from projects in the emerging world.
On the demand side, Codelco expects China to keep consuming roughly as much copper as it does now -- perhaps slightly more -- while the big story will be a slow recovery in North America and Europe. Like many market players, the company expected Chinese demand to slow in the third quarter, but this never happened. As a result, Codelco believes next year will be even better for copper than this year -- which is winding down with prices at two-year highs -- and with somewhat less downside risk.
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