Reuters reported that Chile Codelco aims to lock in most of its sales for 2010 through contract and cut back on spot sales as the market recovers.
Mr Jose Pablo Arellano CEO of Codelco said that the company aims to sell around 80% of its copper through contracts in 2010 and keep spot sales below 20% after spot sales rose in 2009. The global financial crisis hammered demand for the metal used to make electricity lines and cars in 2008 dragging down copper prices from historic highs of around USD 4 per pound.
Mr Arellano said that "I hope that this year sales will normalize because clients now have a clearer view of what their sales will be like. Last year there was great uncertainty in the market. Now there is less but the signs point to an incipient recovery."
Industry sources said that Codelco raised its term premium to the Japanese port of Yokahama to USD 75 per tonne in 2010 and to USD 74 for South Korean buyers.
Top buyer China is up next to start talks with Codelco to decide on its 2010 premiums after getting a 32% cut for 2009 on a weak demand outlook. Unlike most top copper miners that have seen their output slide during the global downturn Codelco has been able to increase production due in great part to its star Gaby mine. If the upward trend continues, the state run company could finally put an end to years of dwindling output in 2009.
Codelco said that last month its copper production rose 16% in January to September period compared with a year earlier to 1.21 million tonnes. Including Codelco 49% stake in El Abra mine, production totaled 1.27 million tonnes.
(Sourced from Reuters)
