Copper prices have been facing a tough time due to oversupply concerns and uncertainty in demand, despite a slight rebound in the previous session. The International Copper Study Group (ICSG) has reported that the copper market is still in surplus, which is putting pressure on prices. The recent U.S. election and the potential policy changes by former President Donald Trump, along with threats of tariffs on China, have added to the uncertainty surrounding demand from the world’s largest copper consumer.
These factors have led to a bearish outlook for copper spot prices in the near term, which could have negative implications for Chile, the top copper producer in the world, and its export revenues. However, Beijing’s decision to cancel tax rebates on non-ferrous metal exports has helped ease some of the oversupply concerns, leading to a small recovery in copper prices.
Looking ahead, the global focus on achieving net-zero emissions and the increasing demand from the semiconductor industry driven by the AI sector are expected to provide long-term support for copper consumption. This indicates that there is potential for price stabilization if global demand strengthens, which could be beneficial for Chile to stabilize its copper industry.
On a positive note, BHP, the world’s largest mining company, has invested over USD 7 billion in its copper operations in Chile. This significant commitment could boost the country’s revenue levels and provide a much-needed boost to the copper industry.
Overall, while the short-term outlook for copper prices may be uncertain due to oversupply and demand concerns, the long-term prospects for the metal remain promising. With the right support and investments, Chile’s copper industry could see a period of stability and growth in the future.