Skyline in Chile

Chile Commodities March 2020

Chile: Copper prices fall to near four-year low in March

In March, average copper prices fell to their lowest point since July 2016 as Covid-19 continued to rattle commodity markets. On average, prices for the red metal logged USD 5,183 per ton (equivalent to USD 2.35 per pound), down from February’s average price of USD 5,688 per ton (equivalent to USD 2.58 per ton). Meanwhile, prices were 19.5% lower than in the same month of 2019.

Copper prices plummeted amid a slump in demand for raw materials as governments around the world imposed severe restrictions to contain Covid-19, extinguishing economic activity in turn. Moreover, March’s historic run on the dollar added further downward pressure on copper, in turn prompting large mining companies to reduce output and postpone new projects. Meanwhile, although Codelco, the world’s largest producer of copper, discarded lowering output, on March 25 it put three projects worth up to USD 8.0 billion on hold to curtail the spread of the virus. The decline in copper prices is complicating the outlook for the Chilean miner, on the heels of a 17% decline in profits last year due to trade war volatility.

This year, copper prices are expected to pick up on expectations that the Covid-19 will be contained. Copper demand from China is slated to recover in the coming months as indicated by a sharp rebound in the manufacturing PMI in March. Nevertheless, prices are unlikely to gain significant ground before global economic activity gets back on track. Looking further ahead, the medium-term price outlook for copper looks bright as refined production lags slightly behind usage, amid limited production capacity and increasing demand for copper in new technologies such as electric vehicles and green-energy projects.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest