Copper prices soar as Codelco workers fall sick

Image: Coldelco.

Copper prices have continued their resurgence, finishing yesterday’s trading on the London Metal Exchange worth $US6112.50 ($8781) a tonne.

The prices of copper are expected to continue their upward trajectory as the global supply gets impacted by the increased spread of coronavirus in Chile, which produces the most copper in the world.

The South American nation had recorded 298,557 cases of the virus as of July 7, with the state-owned copper mining company, Codelco, confirming that 2433 of its staff had contracted the virus.

The Chilean copper producer has been forced to halt production at the El Teniente mine and introduce strict measures at its sites.

This includes a “COVID brigade” of 23 observers who visit 30 areas every 24 hours to monitor sanitary measures and other risks across mine sites.

Global market insight provider, Fitch Solutions expects copper prices to average at around $US5900 per tonne for the remainder of this year.

Prices are expected to remain volatile, however, as investors react to the latest economic indicator releases and COVID-19 news.

“Prices have already rebounded strongly following the COVID-19-induced drop recorded in the first quarter of 2020, but we expect the market will tighten further as economic activity recovers,” Fitch Solutions stated.

Fitch Solutions is also positive about physical demand for copper in the global market.

“… the reopening from lockdowns and recovery of economic activity, especially within the manufacturing and heavy industry sectors will tighten copper fundamentals further, thus we see a further upside to prices beyond the current rally,” it stated.

“China’s recovery has already been tangible, and we expect it to continue with stimulus from the government energising demand for copper.”

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