The copper market is facing two or three years more of pain, though the good news for the metal, which hit a six-year low this week, is that it will recover faster than other commodities, according to Rio Tinto Group.
Copper has tumbled 26 percent this year as China’s faltering expansion curbs demand and with the dollar trading near its highest level since at least 2005, making commodities more expensive for buyers in other currencies.
Rio, the world’s-second biggest miner, is becoming confident the market could move back into deficit by the end of 2017 or in 2018, Jean-Sebastien Jacques, chief executive officer for copper and coal, said Thursday in an interview in Sydney at the Bloomberg Address.
“The one commodity we expect to recover faster than others is likely to be copper,” Jacques said. “In the next two or three years we can see the light at the end of the tunnel as far as copper is concerned.”
China’s slowest pace of economic growth in a quarter of a century is weighing on metals to energy prices and eroding profits for producers. The Bloomberg Commodity Index of returns on 22 raw material this month touched a 16-year low and is heading for the fifth straight annual loss, the longest slide on records dating to 1991.