* Cochilco sees avg copper price $4.17 a lb in 2011
* Sees copper supply deficit 466,000 tonnes in 2011
* Global copper output put at 16.5 mln tonnes in 2011 (Updates with Cochilco quotes, 2012 supply deficit outlook)
SANTIAGO, Jan 26 (Reuters) - World top copper producer Chile on Wednesday sharply raised its price forecast to $4.17 per lb for this year as it expects Chinese demand to stay strong and world supply of the red metal to lag behind.
Chile's state-run copper commission, Cochilco, expects a copper supply deficit of 466,000 tonnes in 2011, greater than the shortfall of 90,000 tonnes last year. The group's view is slightly above than the 444,000-tonne deficit predicted by a Reuters poll on Monday. [ID:nLDE70N1DU]
The group projected a supply deficit of 297,000 tonnes in 2012.
"The supply of copper will be unable to satisfy demand from the main consuming countries like China, Turkey, India and some countries in the European Union," Cochilco said in a statement.
The commission expects demand in top consumer China to grow 6 percent this year.
Andres Mac-Lean, Cochilco's executive vice president, said global demand was expected to grow by more than 1.0 million tonnes annually in the next two years, equivalent to the output of the world's biggest copper mine, Escondida.
Cochilco predicted copper prices would average $4.04 a lb in 2012.
Global copper output is expected to reach 16.5 million tonnes in 2011, up 345,000 tonnes from the previous year, the group projected.
Chile, which produces a third of the world's mined copper, is seen producing 5.7 million tonnes of copper in 2011, up 6.4 percent from 2010. (Reporting by Antonio de la Jara and Alonso Soto; Editing by Simon Gardner)
