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The trade war that the world's major economies have led in the last four months has hit the price of copper hard. Yesterday, the red metal recorded its sixth consecutive day with a drop of 0.02% to US $ 2,785 per pound. It is its lowest value since July 24 of last year, while it was trading at $ 2.72 a pound.
Despite the 14.19% decline that has accumulated so far in 2018, analysts generally have not adjusted their projections for this year – they remain optimistic and estimate that copper will close the year with $ 3 per pound. Among the most positive are Banco Scotia Bank and BICE, which expect the year to end at US $ 3.2 and US $ 3.15 per pound, respectively. On the other hand, Gustavo Lagos, UC Mining Center, Bci Estudios and Banco Santander estimated the price of US $ 3 per pound at the end of 2018 (see infographic).
The experts agreed that in the coming months the main catalyst of copper to be how the trade war evolves and if it manages to be solved in the medium term. Other factors could influence this second half, according to him, the growth prospects of China, the strengthening of the dollar and the result of collective bargaining in the country's largest mining companies.
Gustavo Lagos, of the UC Mining Center, commented that "the trade war is the most important, I will say, right now is the only important thing." Jorge Cantallopts, director of studies at Cochilco, said that "what is impacting is global development expectations based on changes in US and Chinese trading conditions."
Experts expect that the effects on the price of copper will be rather transient and that they will recover. "The price of copper should reverse the losses suffered recently, the case above in the case of the resolution of commercial disputes, and then trade according to the parameters of supply and demand," says Matas Solorza, analyst at Banchile Inversiones. Dr. Ita, his chief economist Miguel Ricaurte explained that "if these factors occur, global growth (and China in particular) will support a strong demand for copper, which will maintain a price recovery."
A week ago, the Ministry of Finance revised upward its forecasts for the growth of the Chilean economy and, with it, the price of copper for 2018. The government has estimated at US $ 2 the average price 88 at US $ 3.12 per pound. According to Cochilco figures, the average price so far this year is US $ 3,113 per pound.
Since the metal fell by 3.78% in the last six days, the question arises as to whether the government has rushed. download the projections. Juan Carlos Guajardo, executive director of Plusmining, said that "to project that the price of the year will remain at the average that it has been up to here is a cautious way of estimating this variable very fluctuating at a time of high uncertainty. "
Bci Estudios, Francisca Prez, commented that the government has not hurry, since "everything is in a plausible scenario."
Analysts also forecast an average value of more than US $ 3 per pound.
Fall of the Year
Up to now, in 2018, the price of copper is 14.19%.
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