Cochilco Lifts 2024 Copper Price Outlook to $3.85/lb in Positive Revision

In a significant update, the Chilean Copper Commission, known as Cochilco, announced on Monday that it is revising its 2024 copper price projections to $3.85 per pound, marking an increase from the previous estimate of $3.75.

Cochilco attributed this upward adjustment to various factors, prominently highlighting the normalization of monetary policy in the United States. However, the primary driver behind this optimistic revision is the robust demand stemming from the ongoing energy transition and the burgeoning electric vehicle sector. Cochilco emphasized that these favorable conditions provide a solid foundation for positive price expectations.

In its official statement, Cochilco expressed confidence in the market dynamics influenced by factors such as the normalization of U.S. monetary policy. The commission underscored the pivotal role played by the demand surge driven by the global shift towards cleaner energy solutions and the accelerating adoption of electric vehicles. These factors collectively contribute to an environment conducive to elevated copper prices.

Looking ahead, Cochilco anticipates the momentum to continue, projecting an average copper price of $3.90 in 2025. This forward-looking estimate reflects the commission's belief in the sustainability of the factors propelling the copper market's positive trajectory.

The report also delved into Chilean copper production forecasts, anticipating a notable 5.7% increase to reach 5.63mMT in 2024. This surge is largely attributed to heightened production from Teck's Quebrada Blanca II project. Looking further ahead to 2025, Cochilco envisions a production volume of 6 million tons, emphasizing the nation's pivotal role in global copper supply.

On a global scale, Cochilco anticipates a 5.8% rise in copper production, reaching 22.79 million tons in 2024, with a subsequent increase to 23.50 million tons in 2025. The commission's global production outlook emphasizes the collective efforts to meet the growing demand for copper on a global scale.

Despite the optimistic production forecasts, Cochilco projects a modest global copper surplus of 176,000 tons in 2024, with a slight decrease to 170,000 tons in 2025. This surplus expectation indicates a delicate balance between production capacity and global demand, emphasizing the need for strategic management of copper supplies to prevent potential oversupply scenarios.

Cochilco's decision to elevate its 2024 copper price projection to $3.85 per pound reflects a positive outlook grounded in a confluence of factors, including U.S. monetary policy normalization and robust demand from the energy transition and electric vehicle sectors. The commission's comprehensive analysis encompasses not only price projections but also production forecasts for Chile and the global market. As the world continues to navigate the complexities of the copper market, Cochilco's insights offer valuable perspectives on the industry's trajectory, influencing decisions and strategies within the copper supply chain.