The supply-demand balance for copper will remain tight through 2011 and likely into 2012, though volatility is possible due to Chinese efforts to control inflation, the head of the world's largest copper producing company, Codelco, said on Sunday.
Codelco Chief Executive Diego Hernandez said on the sidelines of the Prospectors and Developers Conference in Toronto that China would drive demand, but consumption by some developed countries would help support prices.
Copper for three-month delivery on the London Metal Exchange has risen by two-thirds since June, hitting an all-time high of $10 190 per tonne in mid-February on concerns that demand will outstrip production.
Copper, one of the most widely used base metals, is viewed as an economic bellwether due to its industrial versatility. China is the world's largest buyer of the red metal, an essential raw material for the Asian powerhouse's massive urbanization projects.
He said state-owned Codelco would have the capacity to take advantage of booming prices. The company plans to produce some 1.75 million tonnes a year through 2018, when output will start to rise again to 2.1 million tonnes by 2020.
Hernandez said the company was pushing ahead with greenfields and brownfields exploration efforts in Chile Brazil, Colombia and Ecuador.
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