Chile’s industrial output fell by 2.4pc in January compared to the same month in 2020 due to lower production of mining and manufacturing, according to the National Institute of Statistics (INE).
Mining and manufacturing output declined by 0.4pc and 4.4pc, respectively, year-on-year in January, INE indicated, adding that mining declined on a 0.2pc drop in production and extraction of copper and a 0.5pc reduction in metal mining.
A 14.1pc decline in output of metal products driven by lower mining sales had a negative impact on the manufacturing industry in January, INE indicated
Rising mining prices
Chile’s producer price index for mining (PPI) grew 23.1pc in January from the same month last year on higher copper and iron ore prices.
The South American country’s PPI for copper and iron ore rose by 23.4pc and 52.8pc, respectively, in January on an annual basis while the PPI for manufacturing increased by 2.9pc during the same period, according to the INE data.
In Chile, PPI measures the average change in the price of goods and services sold by producers and manufacturers in the market during a given period.
Copper prices will continue increasing between 2021 and 2022 due to the reduced level of copper inventories, a tight supply outlook, high consumption from China, and the expectations of a recovery in demand in developed economies, Cochilco said last week.
Chile’s Codelco indicated last week that it wants to invest the cash generated by the recent spike in copper prices towards its projects without raising further debt.
Copper prices reached $4.17/lb on Mar 1, up by 0.28pc compared to the prior day. Chile’s copper production fell by 0.87pc to 5.73mn mt in 2020, from 5.78mn mt in 2019, due to the effects of the COVID-19 pandemic, according to Cochilco.
Chile, the world’s largest copper producer, has increased its price guidance for copper to $3.30/lb. The country’s copper production is also expected to increase by 3.6pc to 6mn mt this year, while copper output will reach 6.1mn mt in 2022.