Santiago — Copper prices could return to $3/lb if a deal to end the US-China trade dispute holds, Chile's Mining Minister Baldo Prokurica said Wednesday.
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Copper rose to $2.83/lb Wednesday as after US President Donald Trump and Chinese Vice Premier Liu He signed the deal in Washington to ease trade tensions between the two powers.
"The announcement of the end of the trade war is going to create an important opportunity for growth and ... this, of course, is going to bring increased demand for copper and minerals in general, which is good news for Chile," the minister told journalists in Santiago.
Last year, copper prices tumbled to their lowest level since Trump came to office in 2017 on fears that the trade dispute would slow global growth and dampen demand for the metal.
"The general opinion is that copper will trade around $3/lb if these conditions are maintained and this agreement is finally signed," said Prokurica ahead of the signing ceremony.
Under the deal, China has pledged to boost US imports by $200 billion. But the majority of tariffs imposed over the last 18 months will remain in place.
Chile, the world's largest producer of copper, has been badly hit by the trade dispute last year, as well as the outbreak of widespread protests and rioting last October.
The minister noted that the fall in the copper price last year reflected the influence of the trade dispute rather than actual supply and demand, and stocks are currently at their lowest levels in a decade.
Meanwhile, a recent Chinese government decision to increase subsidies for electric vehicles would likely to increase demand for copper and lithium, of which Chile is also a major producer, Prokurica said.
"This gives a strong signal to the lithium industry to continue working to create more space for electric vehicles ... but also for the fight against climate change and to protect the environment," the minister said.