Top copper supplier Chile raised its price projections for the metal based on the prospect of easing of credit conditions in the US and growing demand in the shift away from fossil fuels.
State copper agency Cochilco said Monday it expects prices to average $3.85 a pound this year, up from a previous call of $3.75. It sees prices averaging $3.90 next year. The metal is currently trading at about $3.78 per pound.
The outlook for the wiring metal is improving as US policymakers look to normalize interest rates. Accelerating electric-vehicle sales are also spurring additional demand for the wiring metal. Those factors offset an increase in global geopolitical risks.
Global copper production is set to increase 5.8% this year, outpacing demand growth of 3.2%, resulting in a small surplus. To be sure, the swing back into surplus is vulnerable to supply-side disappointments.
Chilean output is set to rise 5.7% this year and 6.4% next, maintaining its spot as the top producer, Cochilco said. The Democratic Republic of the Congo will take second spot this year, relegating Peru to third, the agency estimates.