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Chile Commodities May 2018

Chile: Copper prices remain broadly stable in May

Copper prices remained broadly stable for a third consecutive month through May. Prices averaged USD 3.10 per pound (equivalent to USD 6,825 per ton) in May, on par with the previous month’s average price. As a result, and despite remaining below the multi-month highs achieved at the beginning of the year, copper prices in May were still 21.8% higher than in the same month last year.

Fresh trade tensions between Washington and Beijing, coupled with the decision of the U.S. government to not renew tariff exemptions for key allies and neighbors, weighed on prices. In addition, the ongoing political crisis in Italy fed risk aversion among investors, exerting negative pressure on copper prices in late May.

Meanwhile, in Chile, the world’s largest copper producer, mining investment is expected to pick up this year, following the election of pro-business President Sebastián Piñera. Confidence among the country’s largest producers picked up significantly in the second quarter. Nevertheless, the development of copper prices in the short term will to an extent depend on the state of labor talks due to begin on 1 June at the Escondida mine—the world’s largest copper mine.

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