Copper prices should begin to recover from the current six-year lows starting in 2019, the Chilean government said Wednesday.
In its latest quarterly report, the Chilean Copper Commission left its price forecasts for this year and next unchanged at $2.15/lb and $2.20/lb, respectively.
"The toughest months were in the first half of 2016. 2017 will be little different. The price will start to rise from 2019," said Deputy Mines Minister Ignacio Moreno.
Chile is the world's largest producer of the metal and is expected to produce 5.54 million mt this year.
"There has been no significantly recovery in copper demand in China nor important structural change in the copper market," Moreno said.
But starting in 2017, the situation could begin to improve as demand rises, shrinking a market overhang in supply, the agency said.
Lower copper production in Chile, China and the Democratic Republic of Congo has seen the forecast market surplus for this year shrink to 128,000 mt, down 48,000 mt from Cochilco's previous forecast, but has not resulted in a significant recovery in the copper price to date.
"The changes have been internalized by the spot metal price so it has not been necessary to adjust our price forecast," said Jorge Cantallopts, Cochilco's head of research.
