Copper mine production in South America about to recover
by David Fleschen
In the US, the ISM manufacturing index fell to 60.6 in June, more than expected. This has weighed on industrial metals prices. Copper subsequently gave up all gains and slipped to just over USD 9,300 per ton. Chile, the world's largest copper mine producer, produced a good 493 thousand tons of copper in May, according to data from the National Statistics Institute. While this was 0.4% less than a year earlier, it was 5.5% more than in April and also the largest amount in one month so far this year. So production seems to be recovering. According to the report, Chile produced 2.35 million tons of copper in the first five months of the year, 1.7% less than in the same period last year. The decline is due to restrictions to combat the Corona virus and a lower metal content in the ores.
Due to the impact of the Corona pandemic, as well as risks of higher taxation on mining companies, Chile's Cochilco Copper Commission back in May backed away from its previous forecast that Chile would produce a record amount of copper this year. The current estimate is 5.8 million tons. This would be only slightly more than last year. For this assumption to be reached, copper production will have to pick up considerably in the further course of the year. In neighboring Peru, number 2 behind Chile, production has meanwhile also recovered from the Corona-related slump. According to data from the Ministry of Energy and Mines, production in April - more recent data is not yet available - was 38% higher than a year earlier. Higher mine output in Chile and Peru has helped ease the global market for copper concentrate. This is also reflected in higher treatment and refining charges. In China, for example, these rose in June for the second month in succession to USD 37.56 per ton, according to SMM data.
Source: Commerzbank Research, Photo: Fotolia