Peru copper producers tapping into price increase

Monday, June 12, 2017

Peru, now the world's second largest copper exporter behind Chile after completing a US$34bn, five-year investment drive, is benefitting from stronger prices of the metal as companies ramp up production at new mines and expansions.

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Copper shipments rose 21% to 600,200t through the first quarter while prices jumped 30.6% to US$2.30/lb from US$1.76/lb a year earlier, according to the central bank.

Freeport-McMoRan, China Minmetals, Glencore, Antamina, Southern Copper, Chinalco and Hudbay Minerals have all ramped up output at their copper mines over the past year, despite strikes and record flooding in 2017.


Peru's copper output rose 9.6% to 563,989t in Q1 from 514,478t a year earlier, according to the energy and mines ministry (MEM). Freeport's Cerro Verde mine produced 123,442t copper in the quarter, followed by China Minmetals' Las Bambas (110,543t), Antamina (93,261t), Southern (74,247t), Glencore's Antapaccay (46,422t), Chinalco's Toromocho (38,333t) and Hudbay's Constancia deposit (27,209t).

Local poly-metallic miners such as Volcan, Milpo, Minsur, Buenaventura and El Brocal have also announced plans to develop copper projects in a bid to tap the long term copper market outlook. Copper prices remain strong despite dipping this year amidst slowing Chinese demand and rising warehouse stocks, according to Scotiabank.

"Despite these negative factors, the price of copper hasn't resumed the long term downward trend maintained until the end of 2016 and has maintained itself above that," Scotiabank Perú analyst Erika Manchego wrote in a report. "That aspect of the price is positive, as it strengthens it in the long term."