The Chilean Copper Commission (Cochilco) has raised its average price projection for copper to $4.3 per pound for this year, up from the previous estimate of $3.85 per pound. For 2025, the projection has been adjusted from $3.9 to $4.25 per pound.
Minister of Mining Aurora Williams noted that this price increase aligns with an anticipated 5% growth in copper production, which is expected to reach 5.5 million tons, making it the highest copper mine production in the world.
Joaquín Morales, executive vice-president of Cochilco, attributed the improved price outlook to several factors. These include a reduced supply due to the stoppage of operations at a mine in Panama, lower production profiles from Anglo American's deposits in Peru and Chile, and production cuts announced by a group of Chinese smelters.
This situation is further supported by strong demand, as copper remains essential for energy and technological transitions in developed economies.
Morales also highlighted that the copper market's fundamentals alone do not explain the rapid price increase. There is a significant speculative component, evidenced by increased buying positions on metals exchanges by commodity investors betting on continued price rises.
He added that if geopolitical and macroeconomic conditions remain stable through 2024-2025 and if progress in energy and technological transitions meets expectations, copper should maintain its upward trend.
Global copper production is projected to reach 22.5 million tons this year, a 2.5% increase from last year, and 23.48 million tons in 2025, marking a 4.3% increase. This suggests a market deficit of 364,000 tons this year and 278,000 tons next year.