Reuters quoted Chile's Codelco as saying that some of its European and US clients asked to cancel orders due to fears there will be less demand amid global financial turmoil.

Codelco did not reveal the amount or value of the cancellations.

The state company begins its sales season in October and local media say it has committed to selling 80% of its 2012 production.

Mr Rodrigo Toro VP at Codelco said that "This reflects the uncertainty in these markets. The cancellation requests are being negotiated because the company has long-standing relations with its clients.”

Surging demand from China, the world's leading copper consumer and supply fears helped lift copper prices to record highs this year but they have since fallen back due to uneasiness over the world economy.

Despite the outlook, local analysts said that Codelco which produces about one tenth of the world's mined copper will have no trouble finding buyers in a market avid for the red metal. Although jitters over a global recession have hit copper prices, labor unrest and extreme weather in Chile and other copper producing countries have affected production. A tight global copper market is expected in the medium term.

The company expects to raise its copper output to 1.8 million tonnes by 2014 and 2.1 million by 2020 from the current 1.7 million through structural projects. Codelco's profits surged 47% to USD 5.8 billion in 2010.

(Sourced from Reuters)