Two milestones were recorded on Tuesday, January 6, 2026, in favor of the Chilean economy. The first was the surge in copper prices, which reached an unprecedented level even for the most optimistic observers. As a result, the jump in the country’s main export triggered a sharp decline in the dollar, which traded below the CLP 900 threshold for the first time in two years.
Copper prices, a mineral that is key to the energy transition and the electromobility industry, rose by 3% to reach US$6.01 per pound. On the same date last year, the metal was trading at around US$4 per pound, implying a sudden increase of US$2 in just 12 months.
This also marks the largest daily increase since September of last year, following a cumulative gain of just over 50% in 2025. The average copper price stood at US$4.52 per pound during that year.
From a longer-term perspective, the sharp increase of US$5 recorded by the metal since late October to the current levels above US$6 stands out. By contrast, moving from US$1 to US$2 per pound took more than three decades to materialize.
A strong increase in international copper prices means that the country receives more dollars for the same volume of copper exports. These dollars enter the economy through mining companies, including both Codelco and private-sector producers.
“To pay wages, taxes, and suppliers in Chile, a significant portion of those dollars must be converted into pesos. When more dollars are available, their price tends to fall. Higher copper prices increase the supply of dollars in the country and, as a result, the dollar loses value against the Chilean peso,” explains Pablo Cruz, economist at Instituto Libertad.
This scenario was clearly reflected in the foreign exchange market. The dollar fell by CLP 11 to CLP 894.2, its lowest level since 2024.
“The Chilean exchange rate fell sharply because the positive copper shock and stronger demand for pesos ended up outweighing the slight appreciation of the global dollar,” said Felipe Sepúlveda, Chief Analyst at Admirals Latin America. He added that this performance reinforces the attractiveness of the peso, given the role of the metal as the country’s main export.
Copper market
According to experts, the recent surge in copper prices is supported by solid fundamentals, with growing demand driven by the energy transition and data centers. More recently, this has been reinforced by increased financial flows into metals.
“A significant rotation of capital is taking place, particularly toward copper, in a context where investors are seeking hedges against macroeconomic risks, persistent inflation, and geopolitical tensions. This is clearly reflected in financial positioning,” notes Juan Carlos Guajardo, Director of Plusmining.
For Emanuelle Santos, Market Analyst at XTB Latam, copper is consolidating “an explosive start to the year.”
“The main driver is a market that has begun to operate under a supply security logic. When the metal is perceived as scarce in the markets where prices are formed and hedging becomes more expensive, the reaction tends to be disproportionate. That is precisely what is happening: a availability premium that overlays the traditional fundamentals of the cycle,” Santos added.
Another factor influencing the market is the strike at the Mantoverde mine in northern Chile, an additional element that the market interprets as a warning signal of higher potential scarcity, especially as the Chilean mining industry faces more than 30 collective bargaining processes over the remainder of the year.
Although Guajardo highlights the solid medium-term backdrop for the metal, he suggests “caution when extrapolating these prices as a new permanent level.”
Fiscal impact
A scenario in which copper prices stabilize in the US$5–6 per pound range “would change the fiscal discussion toward the quality of revenues,” Santos of XTB Latam warns.
Given Codelco’s role as one of the main contributors to the public treasury, a scenario of sustained high copper prices could translate into extraordinary fiscal revenues.
However, these higher revenues are, for now, temporary and therefore should be saved, says Rodrigo Montero, Dean of the Faculty of Administration and Business at Universidad Autónoma.
He points to particular concern regarding the Economic and Social Stabilization Fund, “which allows us to absorb external shocks and mitigate the negative consequences that major economic crises can have on Chilean households. Today, the fund stands at very deteriorated levels.”
“For now, the most sensible and reasonable approach is to treat all of this as temporary and therefore allocate it to savings,” Montero emphasizes.
Considering that the 2026 budget was built on a copper price assumption of US$4.38 per pound, “if average copper prices remain close to US$5.5 per pound—more than one dollar above the assumption used by Dipres—fiscal revenues could increase by at least US$3.0 to US$4.0 billion, based on collections in previous years and the new royalty regime in force since last year,” anticipates Felipe Jaque, Chief Economist at BICE.
Buying with this dollar
The stronger depreciation of the dollar should reduce the cost of imports, led by oil. It could also favor purchases of electronic goods, vehicles, and machinery, thanks to a lower exchange rate.
Likewise, purchases of airline tickets or travel packages priced in dollars would become more affordable, as would credit card payments.
This scenario should reinforce the expectations of the Central Bank and economists regarding a convergence of inflation toward the 3% target during the first quarter.
Source: El Mercurio