The price trend of copper It will be “solid” going forward, while the volatility it is currently experiencing is typical of the uncertainty that the markets are experiencing, the chairman of the board of Chilean Codelco told Reuters on Wednesday, Maximo Pacheco.
Benchmark copper on the London Metal Exchange (LME) fell 0.6% to $8,074 a tonne and came close to last Wednesday’s minimum of $7,867. Prices for the metal, used in energy and construction, are down about 6% this month, after losing 4.4% in April.
Analysts say copper prices fell to six-month lows on Wednesday after data showed factory activity in China, the main consumer of the red metal, contracted faster than expected in May. The figures are further proof that China’s economic recovery, already more focused on services than on the metallurgical industry or construction, is losing steam, they say.
Underlining weak demand for metals, official data showed factory output in Japan and South Korea declined in April.
Within this framework, the Chilean executive explained that the world is experiencing a period of strong demand for red metal due to the structural demand driven by electromobility and decarbonization of the economy. “Volatility is typical of the markets in today’s world, it is a volatile world because it is a world with uncertainty. What matters more to me than volatility is the trend and the trend looks solid”Pacheco commented after the closing ceremony of the Ventanas smelter.
The price per pound in Chile revealed the uncertainty of the sector: in a single day it fell from cUS$368 to cUS$364.
“Copper may go up and down at any given time, but I am very optimistic about the long-term trend because the market is strongly demanding copper,” added.
Chile is the world’s largest copper producer and the second largest lithium producer, both linked to the development of decarbonization and electrification.
In April, the government appointed Codelco to carry out increased state control over strategic lithium projects. The initiative will generate an additional 1.5 billion dollars for the Chilean State, a third of which will be distributed among all the regions of the country.
For his part, the executive president of the firm, Andre Sougarrettold Reuters that the copper company maintains its production projection reported in March, between 1.35 and 1.42 million tons.