Chile’s economic prosperity has been largely fueled by its copper mines, and since India’s demand for copper is expected to rise rapidly over the next decade, Chile’s commodity-exporting future is looking bright. From MercoPress:
COCHILCO, Chile’s copper commission, estimates that by the end of this decade, India’s demand for copper will rise from the current figure of 610,000 tons to between 2.4 million and 3.6 million tons annually.
Due to broad economic growth, India’s increased demand for copper is set to move the nation from sixth place in world consumption of copper to second, just behind China, which accounts for 34% of global copper production, or about 7 million tons.
India is expected to overtake the United States, Germany, South Korea and Japan with this increased consumption –nations whose copper demand today is greater than India’s, but still far behind China’s.
This sharp increase in demand is expected to have an effect on world copper prices.
“With India playing a growing role in the market, the price of copper in the long term would rise about 10%, which is to say, by 20 cents more for each pound,” explained COCHILCO economist Erik Heimlich.
India’s growth rate is also expected to surpass China’s in the next few years, Heimlich said. As a result, Heimlich predicts, “India should change its production structure from services toward more copper-intensive areas”.
Such a shift will allow development of both greater internal consumption, and larger manufacturing production for export.
Heimlich added that copper refinery operators in India had already begun contacting COCHILCO about establishing long-term relationships with Chilean copper producers to supply their growing needs.
Copper production, the principal driving force behind Chile’s economic strength, has brought the country high profits in recent years.
Copper prices Tuesday reached US$4.01 per pound, the highest since June 2008. The rising prices are rapidly approaching the all-time high in June 2008 of US$4.07 per pound.
So far, the average copper price for 2010 is US$3.32 per pound, with a monthly average of US$3.87 per pound.