Copper may not rebound past $2 a pound after an international credit crisis hammered speculators, according to Santiago Gonzalez, Chile’s mining minister. Such price levels are probably “over,” Gonzalez told reporters today in Santiago. Copper may rise to between $1.60 a pound and $1.70 a pound after the credit crunch eases, he said. “The financial crisis is still developing,” said Gonzalez, who is also chairman of state-owned Codelco, the world’s largest copper producer as measured by 2007 output. Copper, considered an economic barometer because of its uses in manufacturing and construction, has plunged 70 percent from a record in May. The metal rose as speculators bet prices would climb higher. By Aug. 1, copper had dropped 16 percent from its peak and speculators had shifted to a net short position, betting the metal would decline further. Since then, the mounting credit crisis has slowed global economic growth, projected at 0.9 percent next year by the World Bank on Dec. 9, down from a 2.5 percent pace in 2008. Single- family home sales in the U.S., the second-largest user of copper after China, tumbled by the most in two decades last month. Industrial growth in China is at the slowest pace since 1999. Copper futures for March delivery rose 1.2 cents, or 0.9 percent, to $1.293 a pound at 11:23 a.m. on the New York Mercantile Exchange’s Comex division. The price has declined from a record $4.2605 on May 5. Most-active futures touched a four-year low of $127.55 a pound in New York yesterday. Copper for delivery in three months tumbled to a four-year low of $2,817.25 a metric ton today on the London Metal Exchange. Speculators’ Role Gonzalez said speculative investment in copper has dried up, a change that is having a bigger effect on the price than slumping demand. Global usage of the metal hasn’t fallen “significantly,” he said. Copper has tumbled 57 percent this year as hedge funds and other large speculators went from a net-long interest of as much as 10,000 copper futures contracts in mid-March to net-short holdings of as much as 18,799 contracts last week, U.S. government data show. Spending by China’s government will spur economic expansion of more than 5 percent next year, he said. Growth below that level may push copper’s price to less than $1 a pound, he said. Chile produces about 35 percent of the world’s mined copper, making it the largest supplier of the metal. Codelco Sticks to Plan Codelco, the Santiago-based copper producer, will maintain its investment plans as it looks to the “long-term,” Gonzalez said. Freeport-McMoRan Copper & Gold Inc., the second-biggest copper supplier, BHP Billiton Ltd., the world’s largest mining company, and Brazil’s Cia. Vale do Rio Doce all have cut output targets or delayed investments as metals prices slumped. In Chile, the government is helping small and mid-sized mining companies as unemployment in the industry mounts, Gonzalez said. The big mining companies haven’t made large job cuts in the country, he said.

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