Chile’s Cochilco Copper Commission raised its forecast for average copper prices in 2021 to $ 4.30 / lb, up from the previous estimate of $ 3.30 / lb, while warning of the effects short-term pricing due to uncertainty generated by political instability and fiscal concerns for industry in Chile and Peru.

For 2022, the agency predicts an average price of US $ 3.95 / lb, against its previous forecast of US $ 3.00 / lb for next year.

In a statement, Cochilco executive vice president Marco Riveros said the increase was mainly due to the short-term deficit in refined copper and lower inventories on metal exchanges.

The agency forecasts a worldwide demand for copper of 24.2Mt for this year, which would represent an increase of 3.4% compared to 2020. In 2022, demand is expected to increase from 927,000t to 25.1Mt.

Regarding copper supply, Cochilco forecast a deficit of 145,000 t for 2021 and a surplus of 46,000 t for 2022. Earlier this year, the agency forecast a shortfall of 70,000 t for this year and a surplus of 116,000 t for next year.

The global health crisis also remains a risk for the two largest copper producers in the world, Chile and Peru.

Chile’s copper production is forecast to increase 1.8% this year from 2020, to around 5.8 Mt.

Photo credit: Codelco