Copper certainly hasn’t dried up in Chile, which is known as one of the top exporters of the red metal. In fact, the country is home to nearly one-third of the world’s copper. According to Trading Economics, copper comprises about 47 percent of the country’s total exports—Chile’s economy certainly depends on the metal’s extraction and disbursement.
Another database, The Observatory of Economic Complexity (OEC), reports that copper racks up 52.1 percent of Chile’s exports, totaling up refined copper, copper ore and raw copper. It makes sense then that the world’s largest copper-producing company, Codelco, is based in Chile.
Recently however numbers reflect a slip in shipments. From July to August 2015, overall exports dropped to 4869 USD Million, from 5234. Comparatively about a year ago, in September 2014, exports reached a total of 5809 USD Million. For starters, it’s important to consider where that copper going.
Close to 23 percent of shipments are sent to China and roughly half of that is brought into the U.S., according to the OEC. And, there’s been a reduced demand of copper from China, according to the U.S. Geological Survey. The decline is in part due to a de-acceleration of China’s economic growth, as well as a 14 percent increase of U.S. mine production in 2014. Both are large variables that play a role in dampening copper’s sail from Chile.
Furthermore, the decrease may be partly attributed to the overall decline of copper’s gross value. Refined copper prices in August 2014 were 22 percent lower than those at the end of 2013, the U.S. Geological Survey also points. In addition, spoiling an upward curve is inclement weather. Cochilco estimates that it will produce 5.94 million tonnes of metal for 2015, lower than the original expectation of 6 million, according to Reuters. The cut is ultimately attributed to an ongoing drought that has impacted the Los Bronces mine as well as temporary work stalls due to heavy rain, according to the article.
Let’s take a close look at the data: The overall decline of Chile’s exports includes all exports from the country, not solely copper. Also noteworthy, the overall average of Chile’s exports from 1991 to 2015 is close to 3211 USD Million—lower than the current dip. Furthermore, the most recent Chile exports forecast from Trading Economics beckons that there will be an overall increase, up to an average of 5079 USD Million, for the third and fourth quarters of 2015. For 2016, quantities are expected to waver at less than 5000 USD Million. In the long-term, the trend will hover at about 5141 in 2020, 2030 and 2050. While weather variables are short-term, the long-term economics data points that the copper mining in Chile will remain relatively steady.
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