Chilean copper association Cochilco expects demand for mining commodities, including copper to strengthen in the near term amid infrastructure investments. The association believes the National Congress meetings in China could roll out plans even if the Asian country holds back from committing to economic growth goal in 2020. Chile is the largest copper producer in the world.
Prices of copper rose by 1.7pc to ¢237.8/lb on Friday, from the prior week as market sentiment turned positive. A day earlier, prices rose to ¢244/lb, the highest since March 13. Expectations of infrastructure boost from China played a major role.
A reduction in China’s copper inventories also supported prices. Inventories in Shanghai Futures Pool dipped by 15.8pc, while in Port of Shanghai those fell by 30.7pc in May compared to April. These falling inventories suggest demand is on the path of recovery, believes Cochilco.
World Bureau of Metal Statistics, however, reported a copper surplus of 188,000mt in Q1 2020 compared to a full-year deficit of 268,000mt in 2019. Global copper production in March was 2mn mt while demand was 1.95mn mt.