CAPE TOWN (miningweekly.com) - UK-based Barclays Capital is bullish on the copper outlook for 2010, expecting the commodity's price to increase to $8 000/ton in the first half of the year.

Addressing delegates at the 2010 Mining Indaba in Cape Town, Barclays Capital MD of the Research Team Kevin Norrish stated that copper prices were forecast to increase to record highs in the next couple of years

Copper prices were anticipated to average $6 875/t this year, rising to $7 000/t next year and a high of $8 500/t in 2012.

The optimistic price forecast was seen against a very low base of $3 200/ton, experienced in 2009.

Although copper demand was down 10% year-on-year in 2009, global copper demand was growing again.

In fact, Norrish noted that demand for the commodity had been growing robustly every month in 2009.

The improvement in the copper price would be supported by limited supply and increased demand from China and countries within the Organisation for Economic Cooperation and Development (OECD).

Chinese demand for copper was still robust and imports of the metal were rebounding, which was supported by steady construction and infrastructure activity in the country.

However, it was expected that China would import one-million tons less copper this year as it cut back on purchases of refined copper because of expanded domestic refinery capacity.

China had also built up its stock levels of the metal.

The decrease in Chinese imports would be offset by strong demand from OECD as indicators pointed to a strong OECD demand rebound in 2010, Norrish noted.

While demand was increasing robustly, supply would be constrained in the future.

Norrish stated that while mine output was growing, there were few major mine projects coming on stream, in the next two years. The biggest was Konkola Deep, which would add 180 000 t to supply.

The seven top copper producers forecasts showed a decrease in capital spend on copper production from a peak of $40-billion in 2008.

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