Investors use Chile to tap copper

Article Excerpt

With output well ahead of China and Peru, Chile is the world’s leading miner of copper; its annual output of 6 million tonnes represents a third of global production, and copper accounts for 24% of Chile’s total exports. Investor gains in Chile directly or indirectly depend on copper. The global demand for refined copper amounted to 24.5 million tonnes in 2018, with an average annual growth rate of 3.4% for the previous 15-year period. China is responsible for 50% of all global demand, with Asia’s combined consumption at 69%. Copper prices follow cyclical patterns linked to global industrial production and the balance of supply and demand. Copper bottomed in November 2001 and rose almost 600% to an all-time high of $4.60 per pound in early 2011 as demand from China ramped up. This resulted in large-scale investments in the expansion of production capacity; that inevitably led to lower prices from 2011 onwards. The current price of $2.52 per pound compares to a 10-year…