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Chile Commodities August 2020

Chile: Copper prices climb again in August

Copper prices continued to increase in August, underpinned by lower supply from China and a weaker U.S. dollar. On average, prices for the red metal logged USD 6,520 per ton (equivalent to USD 2.96 per pound), up from July’s USD 6,372 per ton (equivalent to USD 2.89 per pound). Moreover, prices were 18.4% higher than in the same month of 2019.

In August, copper prices gained ground as production in China recorded an over 5% decrease in July compared to the previous month, suggesting that the Asian giant would resort to imports from international markets. Moreover, the improving economic panorama in both the U.S. and Europe lent further support to prices, as did the recent weakness of the U.S. greenback.

Going forward, copper prices are expected to lose some ground by the end of this year as demand is projected to remain subdued owing to the global recession prompted by the Covid-19 fallout. That said, recovering demand from China and tight supply in top-producing countries pose upside risks to the outlook.

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