The supply and demand dynamic of copper should normalize around 2011, the chief executive of Chile’s state copper giant Codelco, the leading world producer, said Monday.

We are going to face a complex period,” Jose Pablo Arellano told hundreds of subcontract miners at a conference in the Chilean capital of Santiago.

He said prices for copper, Chile’s main export, would only stabilize once the global financial crisis eases.

“In 2011, we will see prices normalize at levels above long-term trends, not at $4 a lb, but at levels above long-term prices,” Arellano said. He did not say what he meant by long-term trends and prices.

Strong prices, driven by limited supplies and booming Asian demand, helped push Chile’s trade surplus to record levels in recent years.

But the price of the metal has plunged on world markets in recent months, prompting the central bank to scale back its economic growth forecasts. Copper prices have more than halved since record levels of over $4 per lb in July as a global slowdown hit demand.

The central bank last month cut its economic growth forecast for 2009 to between 2.0 and 3.0 percent from 3.5 to 4.5 percent, citing the spiraling global financial crisis and plunging prices for copper, its chief export.

It then also cut its estimated average copper price for 2009 by nearly half, to $1.65 per lb from the $3.10 a lb it had estimated in September.

Por Pav Jordan, AFXStreet.