Chile ups copper price forecast again
Chilean state copper commission Cochilco has again increased its copper price forecast for this year to an average of US$2.64/lb from its April estimate of US$2.60/lb.
The agency also raised its price forecast for 2018 to US$2.68/lb from the previous US$2.60/lb.
The revision was based on better economic performance indicators from China, which were above market expectations, mining minister Aurora Williams said in a press release.
Other issues factored in are lower expectations of a new interest rate hike by the US Fed in the second half of the year, as well as the expectation that other central banks will end their cycle of expansive monetary policy, which has led to a depreciation of the US dollar.
Cochilco is forecasting global copper demand to grow 1.5% to 23.6Mt, a 0.2% decrease from its previous forecast, on the back of weaker demand from Europe. Chinese demand is expected to increase by 2.2%.
As a result of the number of mine disruptions that have taken place so far this year in Chile, Peru and Indonesia, the agency lowered its forecast of global mined copper, which it now expects to shrink by 0.4% year-on-year compared to a 0.7% expansion in its previous estimate. Production for this year is expected to reach 20.1Mt.
In the case of Chile's mining output, Cochilco is forecasting production to be 5.6Mt this year, which would be 0.8% growth. Chile's copper output last year was 5.55Mt.
As a result, the global copper market is expected to be 67,000t in deficit by the end of the year, lower than its previous deficit forecast of 85,000t. The agency is forecasting a surplus of 62,000t in 2018.
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