Copper’s 2024 surge and its implications for Chile and Peru

Copper prices have come down, but the metal's spike earlier this year was historic. Producing nations, especially Chile and Peru, have been the beneficiaries.

As our chart shows, the start of the 2024 price run-up began after inventories were sharply drawn down at the end of 2023 and into January. (We've also added the year-on-year rate of growth in global copper usage to our chart: this indicator spiked as stockpiles of copper sank.)

Global copper stocks declined to 1.2 million tons in January, the lowest in a decade. As those inventories were rebuilt, copper prices surged to a record, surpassing USD 5 per pound on Comex by mid-May.

Global copper usage reached 6.6 million tons in Q1 2024, up 4.1% from last year. Long-term global trends have been at play. Copper is a key raw material in green technologies, such as electric vehicles; copper wiring is also crucial to the construction of AI-processing data centers and expanded power grids.

Historically, however, copper trading reflects cyclical trends in the global economy given its fundamental uses in manufacturing. Indeed, as we see in our second chart, Chinese demand picked up in 2024 after posting negative year-on-year growth rates throughout 2023.

Our final two charts examine the supply side for this crucial global commodity. Besides Chile and Peru, the Democratic Republic of Congo and China are important producers.

From January to April of this year, Chile's copper exports have surged 27% by volume and 12% measured in value terms. This will result in relief for Chile's public finances; copper-related tax revenues slumped 40% in 2023 from the 2022 level.

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