The Strategist

Experts: Price of copper will fall by almost 12% in 2020

04/07/2020 - 03:48

The price of copper in 2020 will drop by almost 12% to $ 2.4 per pound, according to the Chile Copper Industry Commission (Cochilco). The country is the world’s largest producer of this metal.

"The average price of copper in 2020 will be $ 2.4 per pound, which is 11.8% lower than 2019. During the current year, the price will move downward under pressure from growing stocks and excess metal... Meanwhile, by 2021 the market will show a scenario of demand recovery and prices for this type of metal will increase to $ 2.9 per pound," the Commission’s study reads.

The Commission notes that in the last week of March, copper prices reached some stabilization in the range between $ 2.1 and $ 2.2 per pound, helped by a weakening dollar, the closure of some copper mines due to coronavirus, and the recovery in China's manufacturing sector that began.

“However, according to our estimates, the drop in demand for copper caused by COVID-19 will outweigh the decline in supply in 2020. In this scenario, the price of red metal will be subject to further decline depending on how long the crisis caused by the virus lasts and how deep the inhibition of global growth will be," the study said.

Experts believe that demand for copper in China, the largest buyer of this metal in the world, will show a fall of 2% in annual terms.