They project a higher outlook than Cochilco for next year.
The best global outlook given the advancement of vaccines against covid-19 and the transition in the US are boosting the mineral, which would extend to 2021.
With a new rise, the main export of the country closed the day, advancing 1.2%, when trading at US $ 3.81 a pound on the London Metal Exchange, a jump that caused the mineral to reach its highest level since on January 22, 2014, when it was priced at US $ 3.32.
As indicated by Cochilco, this increase is explained by the latest announcements from laboratories of positive results in vaccine tests and the expectations that the application to the population will begin next December. “It is in this scenario that investors are pushing for an increase in the price through a strong rebound in demand for copper futures contracts,” said Cochilco Executive Vice President Marco Riveros.
It would also be influencing the transition the United States is going through and the announcements of the president-elect, Joe Biden, regarding key positions under his mandate, such as Janet Yellen in the Secretary of the Treasury or John Kerry as an advisor for climate change.
This is in addition to the fact that it was known that Chinese copper imports in October grew 41% compared to the same month of 2019. The increase also occurs just one day after the auspicious prospects announced by Cochilco, which expects a average price of US $ 2.75 and US $ 2.90 for 2021.
However, experts indicate that the projections of the entity dependent on the Ministry of Mining would fall short, easily exceeding US $ 3 on an annual average.
The importance of these figures lies in the tax effects, which according to Cochilco are estimated at US $ 58 million in value creation for every penny that the price rises.
The Director of Studies at Vantaz Group, Daniela Desormeaux, explains that from the point of view of demand, the prospects for the price of copper are positive, “due to the recovery of traditional uses and the growth of its applications by the renewable energies and electromobility. From a supply perspective, we see a slightly slower post-pandemic recovery, both in the supply of copper from the mine and the secondary (recycling) ”.
That is why, following these scenarios and assuming that the pandemic is controlled, Desormeaux projects that the price of copper should remain in a probable range of between US $ 3 and US $ 3.2.
Even more optimistic estimates are those made by Plusmining executive director Juan Carlos Guajardo, who assures that the mineral will range between US $ 3.3 and US $ 3.4.
“The pandemic marks an important point in world macroeconomic policies, with historical stimuli that lead to inflationary risk, commodities are strengthened. Added to this is a weakening of the dollar and the fundamentals of copper itself, with a weak supply – given the lower investment in the sector since the super cycle – and a demand that has not fallen, mainly from China, but also due to the advance of electrification of cities and of renewable energies ”, explains Guajardo.
The professor from the Catholic University Gustavo Lagos coincides in the good moment of the mineral and indicates that “there is very little supply entering the market, which added to the better mood of the markets due to the eventual control over the pandemic will push the price of copper. There is still the pandemic, but the answer will not be the same, so the outlook looks much better. In this environment, Lagos expects an average value of US $ 3.2 by 2021, which could even improve. The prospects (…) for copper are positive, due to the recovery of traditional uses and the growth of its applications ”.
Source: El Mercurio
Translated with Google Translator
Source: El Mercurio