The rise in the price of copper had a positive impact on the performance of the Chilean stock market and pushed the exchange rate back to its lowest level since May 2024.
By Sofía Fuentes
The tailwinds supporting the Chilean economy appear to be strengthening in the early days of 2026, particularly as its main export product, copper, continues to set new records.
On Tuesday (January 6, 2026), the red metal rose 2.99% and crossed the US$6 per pound threshold on the London Metal Exchange.
What is driving the rally? According to analysts, the surge in copper prices is explained by structural constraints on supply colliding with expanding demand, driven by industrial transformation, the energy transition, and renewed financial appetite for metals.
The combination of solid fundamentals and short-term financial factors—described by analysts as a true “bullish cocktail”—pushed copper above US$13,000 per tonne, equivalent to US$6.019 per pound.
Year to date, the average price stands at US$5.85 per pound, well above the US$3.97 average recorded in the same early days of 2025. In 2026, copper prices on the London Metal Exchange have accumulated a gain of 4.2%.
Meanwhile, COMEX copper in New York, where commodity futures are traded, also posted a strong performance, rising 1.25% during the session and exceeding the US$6 per pound mark.
Tight supply
Analysts agree that the sharp move in copper prices reflects an increasingly tight supply environment, marked by disruptions at major mining operations—such as the strike at the Mantoverde mine—low levels of structural investment, and a significant diversion of metal toward the United States amid concerns over potential tariffs promoted by the Donald Trump administration.
According to a commodities strategy report by ING, there is a risk that tariffs could be reinstated, with a potential increase of 15%, a scenario that will be reviewed in June 2026. This expectation has encouraged arbitrage operations and the front-loading of shipments to the U.S. market.
Juan Cristóbal Ciudad, Senior Market and Industry Analyst at Plusmining, explained that there is “growing structural demand associated with the energy transition, electrification, and the expansion of data centers.”
Another key factor behind the day’s gains was increased capital inflows into metals, with a particular preference for copper.
“A significant rotation of investments toward commodities is being observed, in a context where investors are seeking hedges against macroeconomic risks, more persistent inflation, and geopolitical tensions,” Ciudad noted.
This situation is clearly reflected in investor positioning. According to the latest data from the U.S. Commodity Futures Trading Commission (CFTC), “long positions held by non-commercial participants in copper futures are near the highs seen in 2024, indicating aggressive positioning by financial investors,” he added.
Patricio Faúndez, Head of Economics at GEM Mining Consulting, warned that “with the market so tight, events that were previously relatively marginal now increase the risk of stock disruptions and raise the risk premium; this is why situations such as the Mantoverde strike end up having a stronger impact on prices.”
Inventories
Faúndez added that these factors are compounded by low inventory levels on the London Metal Exchange and tariff-related uncertainty, which has reduced copper availability on that exchange.
One of the most relevant inflection points of the current copper cycle is the deep redistribution of inventories among the main international exchanges. While copper inventories on COMEX surged to a record high of 457,000 tonnes at the end of December 2025—almost five times the level observed at the beginning of that year—stocks on the London Metal Exchange have contracted significantly.
This sharp accumulation in the United States is mainly explained by the stockpiling of metal ahead of a potential imposition of tariffs by the Trump administration. By contrast, copper inventories on the London Metal Exchange fell by more than 60% year on year between 2024 and 2025.
Nevertheless, in the first days of 2026 a slight rebound has been observed in inventories on the London Metal Exchange. According to data from Cochilco, the exchange currently holds 146,075 tonnes of copper, representing a 2.5% increase compared with Monday’s session.
“While a moderate increase has been recorded compared with the previous two sessions, inventory levels remain below those observed between November 19 and December 30.”
In this context, Bank of America recently warned that global copper inventories have fallen to levels not seen in the past 15 years.
Outlook
In Ciudad’s view, the recent movement in copper prices reflects short-term fluctuations rather than a structural change in trend.
Faúndez anticipated that copper will continue to exhibit high volatility in the coming months, in an environment where London Metal Exchange inventories are expected to remain low.
“Any supply-related event can sustain the risk premium and keep prices elevated,” the economist said, estimating that given current volatility, copper prices could move within a wide range, between US$4.5 and US$7 per pound.
Dollar at its lowest level since May 2024
The copper rally also had a direct impact on other local assets, particularly in the foreign exchange market.
During Tuesday’s session (January 6, 2026), the dollar–peso exchange rate broke below the CLP 900 level and fell by CLP 9.6 to CLP 894.9, marking its lowest level since May 2024.
According to data from Plumer, the Chilean peso ranked as the best-performing currency against the U.S. dollar among all emerging market currencies on the day.
“The Chilean exchange rate fell sharply because the positive copper shock and increased demand for pesos ultimately outweighed the mild appreciation of the global dollar,” explained Felipe Sepúlveda, Chief Analyst at Admirals Latam.
By contrast, at the global level, the Dollar Index—which measures the U.S. dollar against a weighted basket of six currencies—rose 0.23% to 98.1 points, reflecting a moderate appreciation of the greenback.
According to analysts, the scope for a more sustained strengthening of the global dollar remains limited, unless this Friday’s U.S. employment report proves strong enough to force the market to reassess the Federal Reserve’s rate-cut timeline.
With the break below the CLP 900 level, “the dollar should move toward the first intermediate support, at around CLP 880, and below that, the next level would be CLP 820,” said Gustavo Gallardo, Head of Trading at Fynsa.
Meanwhile, Renato Campos, Head of Analysis at GH Trading, stated that “the local exchange rate started the year with a very interesting setup, which could define its behavior at least during the first half of the year.”
IPSA close to 11,000 points
The copper boom also caught the attention of local equity investors. The main index of the Santiago Stock Exchange, the S&P IPSA, closed the session up 2.19%, reaching a new record of 10,927.79 points, after having flirted with the 11,000-point level at midday, when it hit an intraday high of 10,996.34.
As a result, the benchmark Chilean index consolidated its second record of 2026 and, according to Bloomberg, has accumulated a gain of 4.26% so far this year.
According to Horacio Herrera, Equity Analyst at MBI Corredora de Bolsa, the rebound in the IPSA is “mainly driven by increased capital flows toward emerging markets,” in a context in which the Chilean index ranked as the fourth-best-performing emerging market during the session.
This is further supported by a reallocation of international investors’ portfolios, with greater emphasis on Latin America and Chile emerging as one of the preferred markets for foreign investors, particularly in light of new political cycles beginning in March.
According to analysts, although the IPSA does not include companies purely exposed to copper, higher copper prices indirectly support the equity market by enhancing the attractiveness of the mining and energy sectors and increasing risk appetite, ultimately benefiting the index as a whole.
In fact, shares of SQM ranked as the second most actively traded of the session, posting a gain of 4.14%, while Cencosud led trading volumes, rising 4.15%.
Source: Diario Financiero