No swift recovery seen for copper market amid surplus, weak demand
SANTIAGO, April 14 (Reuters) - The copper market will not get any respite from weak prices and excess supplies any time soon, even after recent hefty cost cutting and project delays have removed more than a million tonnes of new capacity, top executives said on Tuesday.
Speaking at the CRU Copper conference, the executives painted one of the bleakest outlooks in years at the CRU Copper conference.
While prices have recovered to around $6,000 per tonne from January when the market crashed below $5,500 for the first time since 2009, the market was languishing in a surplus of some 160,000 tonne at the end of the first quarter, according to estimates.
Demand from China, the world's top consumer, grew at a meager 0.7 percent over that period as credit tightened and buying of refrigerators and air conditioners waned.
While cuts in production and delays to projects have removed eight projects equating to 1.5 million tonnes that were due to come onstream by 2019, it will take years before the global market feels any supply pinch and prices recover.
Base metals consultancy CRU does not expect prices to retest 2013 levels around $7,000 per tonne until 2017 and capacity cuts will not bite until 2018 when the market will return to a deficit of 300,000 tonnes.
CRU expects a balanced market this year, growing to a 250,000 tonne surplus in 2016.
"The worst is over for the price, but the (price) recovery is unlikely to be swift and dramatic," Vanessa Davidson, director of CRU copper research and strategy, said.
Barclays and CRU both expect China's demand growth to slow to 4 percent this year, off the double-digit rates seen in during the boom years. Continuación...