A combination of positive signals on the Chinese economy and the fall in the dollar explain rising copper prices over recent days, the head of the Chilean Copper Commission said Thursday.
Copper prices have risen almost 4% this week to around $2.19/lb.
Speaking in Santiago, Sergio Hernandez, executive vice-president of the commission, or Cochilco, said a key factor were most positive numbers on the performance of the Chinese economy, which consumes approximately half of the world's copper.
The Chinese economy is correcting the instability which it had suffered as it moved from an investment model to a model based on consumption, Hernandez said.
Cochilco monitors the copper industry and markets on behalf of the Chilean government.
The other factor is the weakening of the US dollar against other currencies. The dollar was trading at around Chilean Peso 670 Thursday, down from Peso 730 in January.
When the dollar is cheap, that stimulates demand and the price rises, Hernandez said, noting that oil prices have also risen. This attracts commodity investors who have begun to take positions, he said.
Cochilco is due to publish updated price forecasts in the coming days. In December, the body predicted that copper prices will average $2.15/lb this year.
