On today’s conference call we will begin with an update of our view in the metal markets. We will then talk about Southern Copper’s key results related to production, sales, operating costs, financial results, expansion projects, and capital spending program. After that we will open the call for questions.
Focusing on the metal market and prices of the metals that Southern Copper use, during the first half of 2012 metal markets continue to be driven by negative macroeconomic events that effected consumer expectations. The most important ones being Europe’s debt crisis particularly the provinces in Spain and Italy and the possibility of a slowdown of the Chinese economy. Even though we believe copper fundamentals are sound for 2012, demand has been repeatedly negatively influenced by the macro outlook for Europe and China.
At present we perceive a difference in the situations of the Asian markets and the developed markets. In China several sources point to a growth in demand of approximately 7% to 8% for this year. That’s for copper, which should give support to the market of copper in the next few months. The United States and Europe although demand is weak, inventories are extremely tight and we see them increasing to more normal levels over the next 12 months are equally in the United States.
Demand from emerging economics are also growing and some – and that this is somewhat offsetting the weaker consumption that European and the United States markets. See our view currently estimates that there will be a total refine copper demand growth of 3.5% for 2012. If we consider global copper demand is about 19.3 million pounds per year, this will represent approximately 675,000 tons of additional refined copper demand.On the supply side, production has underperformed badly in 2012 due to labor unrest, power churn produced, weather conditions and four grade declines. All of these events are still continuing constraining supply and maintaining a timeliness in the copper market. Currently we are estimating a supply growth of less than 0.5%, less than 1% for the year 2012.