According to the World Bank’s most recent economic data for 2018, published in January 2019, the United States grew at a rate of close to 2.9% and the Eurozone at a rate of 1.9% in comparison to 2017, when both grew around 2.3%. Elsewhere, Chinese economic growth was about 6.6%, down slightly from 6.8% in 2017 and 6.7% in 2016. As a result, global growth stabilized at a rate near 3.0% in 2018.
The report also indicated that emerging economies grew around 4.2%, very similar to the 4.3% recorded in 2017. Chile recorded 3.9% growth, well above the 2017 rate of 1.5% and the Brazilian economy expanded by 1.1%, marking two straight years of growth since its recession. Growth figures are expected to rise for developed economies in 2019; however, growth projections place Chinese figures around 6.2%, down from the aforementioned 6.6%. Brazil is expected to expand even faster, at rate of 2.2%. Growth in Chile is projected at 3.5% in 2019.
In an economy dominated by expectations of new expansionary fiscal policy, infrastructure projects in the United States and better-than-expected development in China, the price of copper rebounded, with highs above 3.20 USD/lb in the first half of 2018 and an annual average of 2.95 USD/lb, reflecting trade tensions between the United States and China. Thus, the average price of copper was 6.0% higher relative to the 2.80 USD/lb recorded in 2017.
While trade tensions between China and the United States continued to mount in the first months of 2019, Cochilco estimates place the average price of copper at 3.05 USD/lb in 2019 and 3.08 USD/lb in 2020. However, these prices could vary if the trade war between the two countries continues through the year, particularly since the PMI for China’s manufacturing sector has not shown values that confirm economic expansion.
In 2018, Chilean mining operations produced nearly 5.83 million tons, a record high and up 6.0% from the 5.50 million tons produced in 2017. According to Cochilco, copper production is expected to grow 1.6% to 5.94 million tons in 2019. As of September 2018, the potential project portfolio and existing investment for 2026 total nearly US$66 billion. If the entire project portfolio comes to fruition, Chile can be expected to produce over 7.1 million tons in 2026.