January 9, 2008 / 2:50 PM / 12 years ago

UPDATE 2-Chile's Cochilco sees '08 copper price at $3.10/lb

(Adds further comments from Titelman and comments from Codelco chief executive, paragraphs 3, 4, 7-11)

By Manuel Farias

SANTIAGO, Jan 9 (Reuters) - Chile’s state copper commission, Cochilco, said on Wednesday it expected average copper prices of about $3.10 per lb in 2008 amid continued tight inventories and strong demand from China.

Cochilco Executive Vice President Eduardo Titelman said copper production in Chile, the largest producer of the metal, will likely come in at 5.7 million tonnes in 2008, up 3.4 percent from 2007 as Codelco’s Gaby mine enters production and output rises at BHP Billiton’s (BHP.AX) Spence mine and at the Collahuasi mine controlled by Xstrata Plc XTA.L and Anglo American (AAL.L).

Chile likely produced some 5.5 million tonnes in 2007, Cochilco’s Titelman said.

He said Cochilco estimated molybdenum production in Chile to fall in 2008 to 40,000 tonnes, from an estimated 44,500 tonnes in 2007.

Titelman said the copper market would remain tight in 2008, with demand of some 18.4 million tonnes versus output of 18.5 million tonnes.

For 2009, Titelman said copper prices would likely remain strong as well, near $2.70/lb. Copper prices are currently around $3.26/lb in New York.

Separately, the chief executive of Chile’s Codelco, Jose Pablo Arellano, said copper demand in the United States had slowed as demand from the housing market declined.

“Indeed, the U.S. market is a little weaker, but fortunately Asia and in particular China remain firm,” Arellano told reporters in the Chilean capital Santiago.

He said 70 percent of growth in global copper demand comes from China.

Earlier this week state-owned Codelco, the world’s largest copper miner, said it had created a new management office that will be dedicated exclusively to developing new business in China.

Codelco said the China New Business office was created in December to consolidate Codelco’s position in the Chinese economy. (Additional reporting by Pav Jordan; Editing by David Gregorio)

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