The world’s copper-mining companies may cut production because a plunge in the price of the metal is eroding profit, Chile’s National Mining Society said.
Companies may seek to reduce supplies if prices stay at current levels, because costs haven’t dropped as fast as sales, the Santiago-based representative of Chile’s mining companies said today in a statement. Chile is the world’s largest copper- producing country.
Some companies already are restricting supplies as a global recession chokes demand for the metal, used in wire and pipe. Freeport-McMoRan Copper & Gold Inc. (FCX:US), the world’s largest publicly traded copper producer, this week cut its output targets, saying prices had fallen “dramatically.”
Copper futures are down 67 percent from a record high in May and are the lowest in more than three years as higher unemployment, slumping manufacturing and home building, and increasing bank losses eroded demand for raw materials.
Copper for March delivery lost 7.7 cents, or 5.2 percent, to $1.3925 a pound at 12:25 p.m. on the Comex division of the Nymex. The metal earlier touched $1.356, the lowest for a most- active contract since May 20, 2005.
Lower copper production will help boost prices once demand steadies, Chilean Deputy Mining Minister Veronica Baraona said yesterday in an interview.
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