Chile: Copper prices ease in August as supply fears wane
September 1, 2011
In August, copper prices dropped 5.5% over the previous month to USD 9,197 per tonne (equivalent to USD 4.14 per pound), contrasting the 4.6% increase in July. Fears of a supply stoppage waned as unions lifted a two-week strike at the Escondida mine (the world largest copper mine) on 5 August, thus easing upward pressures on prices. Moreover, on 2 September, Escondida stated that ?it would lift force majeure? on its copper shipments, imposed on 27 July when the union strike had started to halt production. Despite the monthly price drop, copper prices rose 25.0% over the same month last year. Copper prices are expected to remain elevated as persistent rise in China's metal demand should offset slower growth concerns in other major economies. High prices for copper, which accounts for half of the country's total exports, drove exports to expand 26.3% year-on-year in August. Moreover, the 3-month sum in exports reached USD 20.5 billion in August, which exceeded the USD 19.7 billion peak recorded in May 2008.