Chile cuts copper price forecast
By BUUMBA CHIMBULU
CHILE’S copper commission, Cochilco, has reduced its average copper price forecast for the year to $4.20 per pound from a previous estimate of US$4.30 per pound on the back of slowing Chinese demand and expectations of an easing in United States stimulus.
Prices are expected to average US$3.95 next year as the market swings into surplus, according to Cochilco’s latest copper market trends report, according to Mining.Com magazine.
“After reaching record levels in May, the metal, used in construction and green energy-related infrastructure, has retreated and then bounced around in a tight range.
“Three-month copper rose on Wednesday on the London Metal Exchange (LME) for the first time this week, climbing 0.7 percent to US$9,505 per tonne,” the magazine stated.
The magazine stated that Chinese demand for the metal had slowed down and traders were expecting the United States Federal Reserve to start withdrawing stimulus.
At the same time, it indicated, the supply side had mostly recovered from the covid-19 impact on production.
“While the agency predicts a supply deficit of 153,000 tonnes for 2021, it expects a surplus of 190,000 tonnes for 2022. This compares its previous forecast of a 70,000-tonne deficit and a 116,000-tonne surplus.
“Limited supply, paired with expectations of the main copper consumers’ economic recovery, low inventories and labour disputes, are likely to push prices up,” the magazine stated.
Global copper demand will reach 24 million tonnes this year, up 2.4 percent compared to 2020, and 24.7 million tonnes for 2022, a three percent increase.
Expected 2021 copper production in Chile, the world’s top copper-producing nation, remains around 5.8 million tonnes.