Chile: Cochilco raises copper price projection for CY'22 amid Russia-Ukraine conflict

The Chilean Copper Commission (Cochilco) raised its projection for 2022 copper prices compared to its previous forecast to $4.40 a pound, while for 2023 it raised the estimate from $3.8 per pound to $3.95 per pound.

Cochilco is a highly specialised technical body created in 1976 which advises the government on matters related to the production of copper and its by-products.

Chilean government sources stated that the conflict between Russia and Ukraine has created uncertainties that are pushing copper prices higher, which has led Cochilco to increase its projection for this and next year.

Mining markets coordinator of Cochilco, Victor Garay, stated that copper prices will continue to be influenced by geopolitical factors in the context of reduced inventories on metals exchanges and the risk that supply of metals falls short of demand.

Garay added that for 2022 a refined copper supply of 21,879 thousand tons is projected, which is 3.6% more than the previous year, while a total of 25,219 t is expected for demand, 1.9% more than in 2021, generating a market deficit of 104,000 t of copper.

The prices of copper are expected to trend upwards this year despite weak demand from China, the world's top copper consumer.

Sources added that in 2023 copper production would increase by 5.6% compared to 2022, while supply will increase by 2% which will generate a surplus of 329,000 t in the market.

In Chile, the world's top copper producer, copper production is expected to reach 5.78 million tonnes (mnt) this year, 2.6% more than in 2021.