Antofagasta feels pain of falling copper prices
Falling demand from China will likely cause an oversupply in the copper market by the end of this year and could weigh on prices for the metal until 2016, the CEO of copper miner Antofagasta told CNBC on Tuesday.
"The supply-demand equation is quite tight, at the end of the year we could see some oversupply and that could be repeated next year and in 2015 - it won't be over dramatic but it could affect the prices," Diego Hernandez said.
The chief executive of the Chile-based group expected prices would recover "in a couple of years".
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First half revenue came in 12.1 percent lower from the same period last year after the market price of copper fell 6.8 percent and realized copper prices fell by 15.5 percent, the group said. It remained on track to achieve full year production target of 700,000 tonnes of copper.
Shares of Antofagasta closed around 3.27 percent lower on Tuesday.
Hernandez said the mining giant, valued at £9.03 billion pounds ($14.06 billion), had experienced "quite solid" growth "considering the market" but had to focus on lower cost projects. Core profit fell 31.2 percent to $1.28 billion.
He said production was at full capacity but the company had to consider how fast to grow against a backdrop of decreasing global demand.
"With...demand growth largely dependent on the economies of China and the United States, the pricing environment for copper is expected to remain challenging," Hernandez said in a statement. "We remain focused on cost control, advancing our current projects and maintaining a strong balance sheet while being alert to opportunities that may arise."