inmet predicts positive copper outlook

Toronto based Inmet mining predicted that, globally, very little additional copper production will come on stream this year given the number of projects that were delayed during the economic crisis.

Inmet insisted that the overall outlook for copper demand is broadly positive in 2010 and copper is the most favoured base metal because of its strong fundamentals, especially if global demand recovery gathers momentum in 2010.

The company forecast in its 2009 financial report made public that "The strong demand from emerging markets and pick up in demand from developed economies, combined with tighter supply, are likely to keep prices above USD 3.00 per pound. We also expect continued investor interest to support the price through 2010."

Meanwhile, Inmet predicted that gold prices exceeding USD 1,000 per ounce should continue this year as investment demand continues to be gold's main price driver. Even if economic indicators continue to recover and investors become more willing to diversify into risky assets, investment demand for gold is expected to be maintained as we see more visible signs of rising inflation.

As for zinc, Inmet suggested improving demand in end use markets, strong galvanized steel output in China, a continuing flow of funds and a balanced concentrate market are expected to limit the surplus of zinc along the supply chain and support prices in 2010.

Inmet forecast that its copper and zinc sales volumes will be higher this year due to higher production. We expect zinc production to increase because we plan to mine higher zinc grades at Pyh?salmi in 2010.

In its analysis, the company said that its own overall metal production was fairly consistent between 2008 and 2009, although copper production at the ?ayeli copper and zinc mine in Turkey was down due to lower grades and gold production at the copper gold mine Troilus in Quebec was down because of the processing of low grade stockpiled ore. Zinc production was higher because grades at the Pyh?salmi copper and zinc mine in Finland were higher.

Inmet reported 4% increase in 2009 copper production from 80,500 tonnes in 2008 to 83,600 tonnes, as well as 3% increase in zinc output from 75,400 tonnes in 2008 to 78,000 tonnes in 2009. Gold production last year declined 6% from 244,100 ounces in 2008 to 228,000 ounces in 2009. Pyrite production dropped 32% during the same period to 383,900 tonnes.