World No.1 copper producer Chile sees prices for the red metal staying at "good levels" in coming months despite high inventories as investors bet big on metals, Mining Minister Santiago Gonzalez said on Wednesday.
Gonzalez said financial markets are lifting copper prices as world supply and demand alone fail to support the metal's current value that hit 14-month highs earlier on Wednesday.
"We think that the financial sector is starting to exert influence over copper prices like it did in 2007 and 2008," Gonzalez told reporters on the sidelines of a mining conference. "And I don't mean speculation... but people investing heavily in metals and commodities."
If there is a correction in the market, Gonzalez said copper prices were unlikely to drop below $2.80 a lb, which is near the South American country's average price outlook in the mid-term.
Gonzalez said he expects copper prices to average $2,70 a lb next year, in line with the previous forecast of Chile's state copper think tank Cochilco.
Copper for three-months delivery on the London Metal Exchange traded at $7 079 a tonne in official rings from a close of $7 075 on Tuesday.
The metal used in power and construction hit a day's high of $7,122, its loftiest since late September 2008, as investors returned to the market after taking fright last week when news emerged of Dubai World's debt problems.