PHOENIX (Commodity Online): The record Q2 copper production at the Ilo smelter in Peru encouraged the Phoenix-based Southern Copper to increase red metal production estimation for 2009.

According to CFO of SCC, Genaro Guerrero, the copper production guidance for 2009 has been increased to 490,000 tonnes from 470,000 tonne thanks to better performance at the Ilo smelter in Peru.

Around 298,000 tonnes of copper were produced at Ilo in the last quarter, he said. The company inched up its zinc production forecast for this year to 105,000t from 101,000t, while silver guidance is unchanged at 17Moz.

Meanwhile; Guerrero said SCC believes that supply-demand dynamics will support copper prices above US$2.00/lb in Q4 and 2010.



Inventories at major metals exchanges have been equivalent to some eight days of global consumption recently, the CFO said, adding that during the low metals price cycle of 2001-02 inventory represented about 32 days of consumption.

The company's cash costs for the second quarter were US$1.50/lb not considering byproduct credits, he said. SCC made profits of US$175mn in the second quarter of this year, up from US$78.7mn in the first quarter but short of the US$549mn registered in 2Q08. The company operates in Peru and Mexico.

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