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Nervousness over the state of the global economy is being reflected in copper market volatility, leaving investors struggling to predict future prices, the ceo of Chilean copper producer Codelco said.
Thomas Keller told the World Copper Conference in Santiago that price fluctuations in copper “have lots to do with the issues facing the world economy”.
“One could think the price response has very little relationship to what is happening on the supply-demand side of the copper industry,” Keller said.
“But actually, the market tries to infer what the behaviour of the economy will be in the future and applies these projections to the copper supply-demand side. The volatility is not a new paradigm – it’s a new reality,” he added.
Investors remain “fairly nervous and constantly looking for new information on what the future will be”, Keller said.
He was speaking as copper prices traded at around $7,500 per tonne, down from highs above $9,800 in early 2011.
Andrea Hotter ahotter@metalbulletin.com Twitter: @andreahotter