* Copper expected to average $3.80 in ‘12, $3.90 in ‘13
* Prices expected to soften in 2014 on new output
* Chinese demand to drive market, mine minister says
By Pav Jordan
TORONTO, March 6 (Reuters) - Global copper prices will likely rise over the next two years as demand of the industrial metal outstrips production, Chile’s mining minister said on Tuesday, but the trend should reverse after 2014 as new output comes on line.
Hernan de Solminihac, mine minister of the world’s largest copper producer, said he was confident China’s industrialization would continue to drive demand for the metal, a conductor of heat and electricity that’s not easily replaced with cheaper materials.
“We believe that the fundamentals of the copper industry will be maintained,” said De Solminihac in an interview at PDAC, the sprawling Toronto mining industry convention organized by the Prospectors and Developers Association of Canada.
“In China in particular we are following demand very closely, where there are a lot of new projects for buildings and for electricity, and moving people from rural areas to urban areas,” he said. “They have a lot of projects that will help support copper buying.”
De Solminihac said Chile is expecting an average price of around $3.80 a pound this year, and $3.90 next year. Prices are expected to drop to $3 or lower by 2014.
On Tuesday, copper was trading at $3.75 a pound in New York, pressured lower by a strong U.S. dollar and concerns that slower economic growth in China will weaken demand.
China, the world’s second-largest economy, cut its economic growth target on Monday to an eight-year low of 7.5 percent, sending global equities and commodities lower.
Chile, already the world’s largest copper producer and China’s key supplier, is seen producing some 7.5 million tonnes of copper within eight years, up from about 5.2 million tonnes in 2011.
As well as state-run Codelco, the world’s largest copper producer, such publicly traded copper giants as BHP Billiton, Xstrata and Anglo American operate in the South American country. (Editing by Frank McGurty)