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Chile Commodities April 2021

Chile: Copper prices surge in April

Copper prices continued to rise in April, coming in at USD 9,277 per ton on average (equivalent to USD 4.21 per pound), up from March’s USD 8,988 per ton (USD 4.01 per pound). Moreover, prices were 83.6% higher than in the same month last year.

April’s gains were fueled by strong global demand for the red metal on the back of healthier manufacturing activity. The global composite PMI reached an 11-year high in April, pointing to sustained economic momentum. Moreover, the IHS global copper usage PMI accelerated in April, signaling the strongest increase in manufacturing production in over three years, boosting demand prospects and therefore putting further upside pressure on prices. On the supply side, inventory levels fell notably in the second half of April while scrap supplies were relatively subdued, which should have lent further support to prices in the month.

Looking ahead, copper prices are expected to fall considerably this year, dragged down by increasing production—especially in South America—as Covid-19 restrictions are gradually removed. That said, the projected fall should be partly cushioned by rising demand for electric vehicles and green-energy projects, while upside risks stem from ongoing workers’ protests at major mines in Chile.

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