Copper withstands US-Iran uncertainty
Chilean mining union Sonami voices concerns about growth in 2020
The price of copper has withstood uncertainty from US-Iran tensions at the start of 2020.
Having dipped on Friday following the American assassination of Iranian general Qassem Soleimani, spot London copper experienced three consecutive sessions of growth to finish Wednesday at £6,153.5 per tonne.
Fears that Iran’s missile attack on the US Al-Asad military base in Iraq would cut the metal's recovery short did not materialise. While three-month copper on the London Metal Exchange did fall by 0.6 per cent initially it recovered to trade up more than 0.5 per cent.
A soft dollar and firm yuan have helped the price of copper, as have tight supplies and low inventories. However the metal is still attempting to rebound to the levels of previous years.
Some analysts initially hoped that the partial resolution of the US-China trade deal would help boost the metal further. Yet news from Chile, one of the key copper producers, has dampened such hopes.
Outpit at the Escondida mine, operated by both Chile’s state miner Codelco and the Anglo-Australian firm BHP, slumped in November, according to the latest data from state copper agency Cochilco.
Mining operations in the copper-rich county have been severely affected in recent months by riots and protests. In October Codelco workers joined mass protests throughout the nation, vowing to strike for better working conditions and better pay.
While the riots have calmed in recent months the underlying unrest continues and threatens to disrupt output yet again in the months to come.
Diego Hernandez, president of Chile’s mining trade union Sonami and veteran mining executive, voiced his doubts that copper will experience a strong rebound in 2020. “We’re expecting a price around US$ 2.80 (per pound)," he said, "though it depends on the international scenario. But we don’t expect a very vigorous rebound in price.”
Hernandez did however emphasise the long-term utility of copper, for instance its use in the growing manufacture of electric vehicles.
FURTHER READING:Copper price forecast for 2020 and beyond
FURTHER READING: Copper output hampered by Chile unrest, Antofagasta warns