Healthy demand for copper from China could push prices beyond levels forecast by the industry, according to the head of Codelco, the world's biggest copper producing company.

Diego Hernández, who took over as chief executive of the Chilean state company in May, said he was “optimistic, but not over optimistic” on prices in the medium to long term.

China accounts for a third of world demand. If its appetite for copper to fuel its industrial boom continues – “and it should continue”, Mr Hernández said, then demand for the metal, which has been growing at about 3 per cent in recent years, should stay strong.

Producers have been grappling with lower grade deposits, which are costlier to develop. As a result, Mr Hernández said, the industry consensus for a long-term price of $2.2 per pound – about $4,850 a tonne – was “reasonable, and could even be a bit conservative”.

Benchmark copper prices on the London Metal Exchange hit a peak of just over $8,000 a tonne in April, but have since fallen to about $6,600 on concerns about slowing demand. Miners are usually cautious in their long-term price forecasts, as these are used to calculate the feasibility of multiyear investment projects.

Speaking at Codelco's Santiago headquarters, Mr Hernández dismissed fears of a serious contraction in China eroding demand, saying it had been predicted before but had not materialised. “There can be ups and downs but the trend is to keep growing.”

World producers, including Codelco, had been slow to respond to rising copper demand, partly because of having to tap the lower grade deposits. Codelco has a $15bn investment plan for the next five years designed to guarantee output at current levels of about 1.75m tonnes for the next three years and to boost it to 2m tonnes within seven years.