The global copper market is expected to be in a 230,000 metric ton deficit for 2006, in part due to primary smelter production falling following tighter conditions in the concentrate market, consultancy Bloomsbury Minerals Economics said this week.

The strike at Chile's giant Escondida copper mine and a production shortfall at Chuquicamata due to a rockslide have pushed an already tight concentrate market further into deficit, now pegged at a record 330,000 tons of contained copper, BME said.

The reduction in concentrate availability has seen copper spot treatment and refining charges – fees paid by miners to turn concentrate into refined metal – plummet from around $100/ton and 10 cents/pound last month to $85/ton and 8.5 cents/lb before dropping to current levels of $60/ton and 6 cents/lb.

Given the tightness in the concentrate market, BME expected the market to increasingly favor miners.

"After a brief rally towards the end of this year, BME expects terms to fall to around $30/ton and 3c/lb by mid-2008," BME said in a report.

For 2007, BME sees the copper cathode market in a 110,000 tons deficit.

Current stock disposals from the Chinese State Reserve Bureau were offsetting the current copper cathode deficit, BME said.

However, collective stock drawdowns of 330,000 tons in concentrates, 230,000 in cathode and 200,000 tons in semi-finished products in China could produce a "nickel-like situation" for copper cathode, BME said.