(Bloomberg) — The deadly coronavirus that’s rattled markets since January won’t stop copper prices from surging to $3 a pound this year, according to Chilean Mining Minister Baldo Prokurica.
The price of copper, often used as a barometer for the global economy, has dropped about 7% so far in 2020, signaling demand for the metal used in everything from electronics to automobiles has cooled as investors retreat from riskier assets.
Copper supplies at warehouses tracked by the Shanghai Futures Exchange expanded to the highest ever for this time of year as logistical constraints inside China are stopping output from reaching end-users, further pressuring down price for the metal.
Copper prices “should stabilize once the coronavirus passes,” Prokurica said in an interview at the PDAC conference in Toronto. “Nobody has information to say that the coronavirus will last one or two or three months, but SARS and the like lasted between two and three months, so we think that is what will happen with the coronavirus.”
On Monday, copper climbed 2.2% in New York to settle at $2.595 a pound, buoyed by the gradual reopening of factories across China and signs of imminent support from central banks to tackle economic fallout from the outbreak.
“I have the impression that the price should be between $3 and something more,” Prokurica said, citing the demand and supply situation and wage negotiations due at mines in Chile as potential factors.
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