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16/7/2018
The urban growth of China and Asia will boost the sustainability of mining investment for copper production in Peru, despite the recent decline in its price, according to economist and ESAN professor César Fuentes.
The price of copper in the future fell to $ 2.77 per pound last Friday in New York, after reaching $ 3.30 per pound on June 8.
"I believe that mining investments will continue because of growth China's urban speed is accelerating, as well as Asia in general.This will be more important than the l 39; expansion of the manufacturing sector in the coming years, "he said.
Profitability
He said that despite the decline in the price of copper, mining companies are still profitable, but to a lesser extent when the red metal was above $ 3 a pound. This is because their production costs are competitive.
"Mining companies can now afford up to $ 2 per pound of copper, now they have good margins, but they do not have the spectacular margins anymore. they recorded five years ago, which affect profits, but not their operations. "
In this sense, he commented that mining companies are" jealous of declaring their unit costs of production "c & # 39; is a trade secret.
However, he explained that for information processed outside the country, the Peruvian copper sector is very competitive on a global scale. "In this case, Peru and Chile have the lowest unit costs in the world in terms of production, which makes them generally the most competitive in the world."
Sources indicate that the demand for copper mined in Peru comes mainly from Southeast Asia because of its urban growth and its manufacturing industry.
"Demand is lower for the United States and Europe because they have gone from manufacturing economies to a service economy," says the academic.
Natural Market
Thus, the academic stated that our natural market for copper over the next few years is in Southeast Asia and, in particular, in China.
"The future of the sector lies in the Asian region," he said
. ] Commercial War
Sources have said that copper demand for manufacturing and industry in China and Southeast Asia will be affected by the trade war on tariffs with the United States. United States
. not in its entirety, but in the sectors of machinery and construction, which consume copper, "he said.
Thus, the decline in the price of this ore will affect the short-term profitability of companies and […]
The Re
"In the future prices of copper, we observe that in one month they have fallen by 15%, for the contracts that we will have from July of this year to 39 in July 2019 "
Forum
Sources participated in the forum" The Impact of the World War on the Rates of the Great Powers in the Peruvian Economy ", organized by ESAN
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