THE SPIKE IN COMMODITIES PRICES IN 2017 WAS ONE OF THE FACTORS BEHIND GLOBAL ECONOMIC GROWTH. BOTH IN THE UNITED STATES AND THE EUROZONE, IT GREW AT A RATE OF NEARLY 2.3%, COMPARED TO THE 2016 RATES OF 1.5% AND 1.8%, RESPECTIVELY. ELSEWHERE, THE CHINESE ECONOMY EXPANDED ABOUT 6.8%, UP FROM 6.7% IN 2016.

Published in January 2018, the World Bank’s most recent economic projections suggest that emerging economies will continue to grow at nearly 4.3%, up from 3.7% in 2016. China stands out with growth of nearly 6.8%, well above the 6.5% target. Chile recorded growth of 1.6%, in line with 2016 rates, while the Brazilian economy expanded nearly 1.0%, marking two straight years of recession. In 2018, growth in developed economies is expected to slow while the Chinese economy should expand 6.4%, down from the aforementioned 6.8%. Brazil is expected to grow even faster than previously predicted, at a rate of 2.0%. Growth in Chile is expected to recover, reaching 2.4% thanks to mining exports.

COPPER PRICES

The economy was dominated by expectations of new expansionary fiscal policies and infrastructure projects in the United States, better-than-expected performance in China and reduced copper supply as a result of mining strikes in Chile, Indonesia and Peru. The price of the red metal recovered in 2017, averaging 2.80 USD/lb for the year, compared with 2.21 USD/lb in 2016 and 2.49 USD/lb in 2015.

Cochilco estimates an average copper price of 3.06 USD/lb in 2018, based on improved industrial projections and recovered copper consumption in Europe, the United States and India. The Chinese manufacturing sector's pace of expansion has consolidated with sustained, higher-than-expected growth in the last year.

COPPER PRODUCTION

In 2017, Chilean mining operations produced nearly 5.5 million tons, down 0.9% from the 5.6 million tons produced in 2016. According to Cochilco, copper production is expected to grow 4.3% in 2018 to 5.74 million tons and to 5.91 million tons in 2019. As of August 2017, the potential project portfolio and existing investment for 2026 total nearly US$65 billion. If the entire project portfolio comes to fruition, Chile can be expected to produce over 6.1 million tons in 2026.