Cochilco raises 2022 copper price forecast to $4.40/lb

BHP’s Escondida copper mine in Chile. (Image: Wikimedia Commons)

The Chilean Copper Commission (Cochilco) on Thursday raised its projection for 2022 copper prices to $4.40 per pound, amid a perceived scarcity due to the Russia-Ukraine conflict.

In January, Cochilco maintained its projected price for copper at $3.95 per pound. The commission said the rise is influenced by economic factors “dominated by the context of reduced inventories in metal markets and the risk that the global supply of the metal won’t meet expectations.”

Mining Minister Marcela Hernando, told reporters that while the price increase is good for Chile, the world’s no. 1 copper producer, that “not all this price increase will be reflected in tax collection since there’s also an increase in fuel prices, steel, maritime transport and mining supplies.”

Cochilco’s mining markets coordinator, Victor Garay, said the upward projection could be corrected in the upcoming months if the war in Ukraine leads to a restriction of Russian copper supplies or increased oil and energy prices.

For 2023, Cochilco projected a price of $3.95 per pound, up from $3.80 in January.

It projected Chilean copper production at 5.78 million tonnes for 2022, a 2.6% year-on-year increase.

According to Cochilco, the world market for refined copper will have a deficit this year of 104,000 tonnes, putting downward pressure on metal exchange inventories. By 2023 it projects a surplus of 329,000 tonnes.

Garay attributed the drop in production in some local mines due to water problems and lower ore grades. He added that some investment projects have been delayed or interfered with operations, but performance will improve in the second half of the year.

Garay also said that BHP’s operations in Escondida, the largest copper deposit in the world, will begin to rebound after a consecutive decline experienced since mid-2020.

(By Fabian Cambero and Alexander Villegas; Editing by Diane Craft)

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