Chile’s state-owned Codelco, the world’s largest copper producer, said on Wednesday it expects copper prices to fall in a year to between $3.80 and $3.90 per pound, down from prices currently just below $4.30 per pound.
“It’s always very hard to forecast prices, especially in the short and medium term, but next year we will probably have prices slightly lower than this year,” Codelco CEO Octavio Araneda told reporters during the inauguration of a virtual operations center.
The forecast is more pessimistic than that of Chilean copper regulator Cochilco, which said this week it sees copper prices falling to $3.95 per pound next year.
Copper prices rose significantly this year in what some analysts see as a new supercycle for the red metal as demand rises for its use in electric vehicles.
Politicians in Chile and Peru, the world’s No. 1 and No. 2 copper producers respectively, are working to raise taxes on miners in order to capture more profits from those expected high prices.
But Araneda said he has less bullish expectations, forecasting that copper supply will outpace demand until 2024. Only then will higher demand for electric vehicles match up with copper output, he said. Araneda added that Codelco’s copper output in 2021 should be similar to that of 2020, when it produced 1.6 billion tonnes.