The Chilean Copper Commission has predicted that copper prices could see a downtrend in the medium to long term time frame. Chile is the world's biggest producer of copper.
After a survey of analysts, the Commission has increased their 2012 price forecast for copper to $3.84/lb, up $0.22 from its previous forecast. Copper prices are expected to be around $3.86/lb during H2, 2012 after which it is seen declining to $3.77 in 2013. With copper experiencing a long term downtrend, prices are expected to fall $3.05/lb in 2017.
The price forecast factors a mild recession in Europe and also a soft landing in China, the biggest market for Chilean copper. But a global recession was considered a low probability event.
Chile's economy is extremely connected to copper production. The copper industry accounts for about 15% of the country's Gross Domestic Product (GDP). Chile not only accounts for more than 30% of global copper supply, it also holds about 28% of total global copper reserves.
Source: Commodity Online