Chile: Copper prices rise in March
April 1, 2019
On the heels of February’s bull-run, copper prices held onto the previous month’s gains through March. Average prices for the red metal rose to USD 2.92 per pound in March (equivalent to USD 6,439 per ton), from USD 2.86 per pound (equivalent to USD 6,300 per ton) in February, to reach a nine-month high. Nevertheless, average copper prices were still 5.2% lower than in the same month last year.
The price for copper fluctuated somewhat in March, amid a stronger dollar and upbeat industrial momentum in China. After weakening in February on dovish comments from the Fed, the dollar rebounded in mid-March, putting downward pressure on copper. Prices recovered at the end of the month, however, underpinned by renewed momentum in the Chinese manufacturing sector, which is expected to buttress demand for the red metal.
Supply headwinds in Chile likely supported prices, as copper output recorded its lowest reading in nearly two years in February, amid heavy rains and scheduled maintenance work in some of the country’s biggest mines. Moreover, officials blocked additional funding for upgrading Codelco—the state-owned mining company and the world’s largest supplier—despite warnings that output might fall unless key sites are modernized. Meanwhile, the world’s top copper miners will gather in Santiago on 8 April, in the annual Cesco Week, to discuss the future of the industry.
Author: Nicolás J. Aguilar, Economist