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Chile GDP June 2020

Chile: Copper prices jump to five-month high in June

Average copper prices rose in June on the back of upbeat demand from China and supply-side concerns in large producing countries. On average, prices for the red metal logged USD 5,755 per ton (equivalent to USD 2.61 per pound), up from May’s USD 5,241 per ton (equivalent to USD 2.38 per pound). That said, prices were 2.2% lower than in the same month of 2019.

In June, copper prices recouped all of March’s losses and are currently heading for their largest quarterly rise in a decade. On the one hand, signs of a sustained recovery in China’s industrial sector stoked expectations of upbeat demand ahead, at a time of falling copper warehouse inventories. Moreover, improving manufacturing activity in the U.S. and in the Eurozone manufacturing PMI in June further stoked demand expectations. On the other hand, supply-side jitters propelled prices higher, with output in top producer Chile being choked off by tough restrictions, as the country struggles to contain the Covid-19 outbreak.

Going forward, copper prices are expected to moderate by the end of this year as demand for copper-made products trails behind supply owing to the global recession prompted by the Covid-19 fallout. Nevertheless, protracted supply-side constraints in top producing countries pose an upside risk to the outlook. Looking further ahead, the medium-term price outlook looks brighter as refined production lags slightly behind usage, amid limited production capacity and increasing demand for copper in new technologies such as electric vehicles and green-energy projects.

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