December 2, 2021

The world’s largest copper producer is predicting lower prices in 2022.

Yesterday, the CEO of Chilean copper producer Codelco stated the company has predicted copper will fall to between $3.80 and $3.90 per pound ($8,340/mt to $8,600/mt) in 2022. This is down from current level of $4.26 per pound ($9,400/mt).  The company believes that supply will outstrip demand until 2024, hence lower prices are predicted.  The company produced 1.6 billion tonnes in 2020 and is on pace to produce similar volumes this year. 

Copper consumers may view forecasts such as the Codelco one as an argument not to hedge. AEGIS urges a statistical approach that measures how much you should hedge to reach your financial goals if prices move against you. (12/2/2021)

Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here. 

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