Chile Commodities September 2020

Chile

Chile: Copper prices rise in September

October 9, 2020

Copper prices were volatile in September, although they gained some ground overall, mainly due to strengthening manufacturing activity in China. On average, prices for the red metal logged USD 6,704 per ton (equivalent to USD 3.04 per pound), up from August’s USD 6,520 per ton (equivalent to USD 2.96 per pound). Moreover, prices were 17.1% higher than in the same month of 2019.

September’s gains came amid upbeat Chinese demand and a possible strike at Chile’s Escondida—the world’s largest copper mine—which raised supply concerns. On the other hand, fading hopes for an additional fiscal package in the U.S. and uncertainty over the pace of the global economic recovery weighed on prices.

Going forward, copper prices are expected to lose some ground by the end of this year due to still-subdued global demand stemming from the Covid-19 fallout. Next year, the global recovery, coupled with the spread of electric vehicles and green-energy projects, will support prices. That said, further waves of Covid-19 cases and subsequent lockdown measures cloud the outlook.

FocusEconomics panelists forecast copper prices to average USD 6,201 per ton in Q4 2020 and USD 6,332 per ton in Q4 2021.


Author: Massimo Bassetti, Senior Economist

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Chile Commodities September 20 20

Note: Year-on-year and month-on-month changes of industrial production index in %.
Source: French Statistics Institute (INSEE).


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