Chile: Copper prices stable in April
May 2, 2019
Copper prices remained fairly stable throughout April. Average prices for the red metal clocked USD 2.92 per pound in April (equivalent to USD 6,440 per ton), unchanged from March’s average. Nevertheless, copper prices were still 5.9% lower than in the same month last year. On a year-to-date basis, copper prices were up by 8.0%.
The price for copper trended upward in the first half April on anticipation of increased demand from China, after recent industrial data pointed to regained momentum in the country’s manufacturing sector. Expectations proved overly optimistic, however, as inventories of the red metal jumped in the second half of the month, amid lower-than-expected demand ahead of Chinese holidays in May. In turn, copper prices fell in the second half of the month.
Meanwhile, the outlook for copper supply looks tight in the near- to long-term. At the annual Cesco week in Santiago, the world’s top copper miners were in bullish spirits as demand is widely expected to outstrip supply during the next five years. Although miners reported that new sites are scheduled to come online this year, the collapse in prices in the second half of 2018 put a number of projects on hold, which should slow output growth of the red metal going forward. In Chile, state-owned Codelco, which is the world’s largest supplier, has been unable to secure government funding to expand its operations, despite warnings that output might fall unless key sites are modernized.
Author: Nicolás J. Aguilar, Economist