Chile: Copper prices climb in July
Average copper prices gained considerable ground in July underpinned by upbeat demand from China and persistent supply-side concerns in large producing countries. On average, prices for the red metal logged USD 6,372 per ton (equivalent to USD 2.89 per pound), up from June’s USD 5,755 per ton (equivalent to USD 2.61 per pound). Moreover, prices were 8.8% higher than in the same month of 2019.
In July, copper prices strengthened considerably thanks to recovering demand from the Asian giant, where growth in industrial production accelerated amid robust fiscal and monetary stimulus. Expanding manufacturing activity in the U.S. and in the Eurozone as signaled by July PMI readings further supported the prices. Supply-side jitters also propelled prices higher, as top producers Chile and Peru introduced social distancing measures in their copper-producing regions in order to contain Covid-19 infections.
Going forward, copper prices are expected to weaken somewhat by the end of this year as demand prospects cool due to the global recession prompted by the Covid-19 fallout. That said, protracted supply-side constraints in top producing countries pose an upside risk to the outlook.