BHP Billiton remains confident about the long term outlook for copper despite the metal's price being tipped to slide 11% due to fears of weaker demand in China and Europe.

The Australian Bureau of Resources and Energy said that growth in global copper production was likely to exceed consumption and that prices might average USD 7860 per tonne this year compared with an average USD 8852 last year.

The weakening of market sentiment has occurred because of recent weaker Chinese economic data and uncertainty over the outlook for a number of large European economies. Also predicted similar price falls for aluminium, zinc and nickel.

BHP has acknowledged that short term copper demand will be affected by continuing economic uncertainty, particularly in Europe but said that it retained its confidence in the long term outlook for copper.

Signalling its confidence, it has bought up four exploration licences and 5 licence applications around its Olympic Dam copper and uranium mine in South Australia from junior explorer Copper Range for USD 3 million, even as questions persist over whether it will proceed with a multibillion-dollar expansion at the site.

It expected production at the giant Chilean copper mine Escondida to improve markedly in the June quarter helping the world's largest copper mine to meet production guidance for the financial year despite being disrupted by strikes.

Mr Peter Beaven president of its base metals division the miner is forecasting production at the operation to come in 'marginally lower than the previous fiscal year.

Source - The Age.com

(www.steelguru.com)