Copper prices traded within $2 of their all-time peak on Thursday amid concerns that the market faces a “perfect storm” for demand and a “perfect nightmare” for supply.

The comments by Owen Hegarty, chief executive of Oxiana, the Australian mining company, were delivered at a key copper conference in Chile, where the upbeat mood this week stood in contrast with gloomy forecasts for the world economy published by the International Monetary Fund.

Mr Hegarty said copper was set to be a “very big winner” due to strong demand from Asia. His prediction was followed by talk among traders that copper could spike to $10,000 a tonne due to power supply problems in Chile, which produces about 40 per cent of global supplies.

Copper prices hit a high of $8,818 a tonne on Thursday, just below the record $8,820 set in March. A drought in Chile has reduced water levels at hydroelectric reservoirs and could limit electricity supplies. Mines in Chile operated by Codelco, the state-owned producer, Anglo American, Antofagasta and Freeport McMoRan, are vulnerable to power supply cuts.

Energy in Chile is “a real issue” said Bret Clayton, chief executive of Rio Tinto’s copper business, who pointed out that estimates for future supplies were being overestimated as new mines had to be developed in high risk areas of the world.

Kevin Norrish, director of commodities research at Barclays Capital, said there had been huge pressure on global copper supplies due to a lack of high-quality reserves in favourable locations, shortages of skilled labour and huge lead times for essential equipment.

“It may be many years before this situation eases,” said Mr Norrish, who also pointed out that a key factor driving copper prices higher had been substantial growth in demand from China and India.

This view is shared by Vivek Tulpule, chief economist of Rio Tinto, who has forecast that annual global copper demand growth can be sustained at 4 per cent for at least a decade and possibly a generation.