Chile: Copper prices rally in February
February 27, 2019
Copper prices rose in February after a tepid increase in January. Prices averaged USD 2.86 per pound (equivalent to USD 6,300 per ton) in February, down from the previous month’s USD 2.69 per pound. Consequently, the average copper price in February was 6.3% lower than in the same month last year.
The price for copper climbed at the end of February, after Donald Trump delayed an increase in tariffs on Chinese goods as the U.S. and China seem to edge closer to a trade deal. Chinese stock markets rallied on the news, which, in turn, boosted demand for the red metal and pushed up prices. Moreover, a recent fall of the dollar against a wide range of emerging market-currencies, coupled with dropping warehouse levels at the end of February owing to supply headwinds, further stoked prices.
In Chile, copper output growth slowed in February, after major producers were forced to shut operations in the north of the country due to heavy rains at the start of the month. Meanwhile, the state copper miner Codelco—the world’s largest supplier—announced plans to convert Chuquicamata, its second biggest mine, from an open cast operation into an underground facility. The move is part of a 10-year plan to sustain a stable output of the red metal, amid depleting ore deposits which will likely put a lid on long-term prices.
Author: Nicolás J. Aguilar, Economist