'High copper prices may not last long'

With the copper industry fast losing markets to aluminium and plastics, especially in the areas of plumbing and architecture, the current high price of the red metal will be unsustainable for long, said Jurgen Leibbrandt, Executive Vice President - Market Development, of the world’s largest copper producer, Codelco of Chile.

In the near term, however, strong demand from the growing Asian economies will drive sentiment and price will range between $7,500-8,000 a tonne, he said. However, in the long run, say after five years, the price will fall substantially to range between $3,000-$5,000 a tonne, he added.

Currently, copper is quoted at $7,500 a tonne and has been moving in the range of $7,500-8,200 a tonne since the last one year.

Talking on the sidelines of the India Copper Forum 2008 in Mumbai on Friday, Leibbrandt said, “Copper is estimated to remain surplus this year. But, due to the lack of investment in mining, it will be exhausted next year.”

The industry is anticipating supply deficit next year. Still, the prices may remain under pressure due to the lack of demand.

The infrastructure sector consumes about 30 per cent of the total global copper production and a loss in demand from this segment can affect the price dramatically, an expert said.

Despite that, there is a huge potential in India, as the per capita consumption of the metal is low at 0.5 kg as against 5 kg in China and 10 kg in most developed nations.

Ajit Advani, CEO of International Copper Promotion Council (India), an arm of the global body, International Copper Association, which promotes the use of copper, said that demand was bound to increase in the country, given the infrastructure development and green-energy emphasis laid out by the government and consumer awareness towards the use of copper articles for low maintenance and long life cycle.

India produces about one million tonnes of copper and consumes about 0.65 tonnes annually. Last year, the country exported 0.35 million tonnes.