Copper exports indicate that Chile is on a better path

Chile recorded a trade surplus of US$ 952 million in May amid a positive performance of shipments of copperthe Central Bank reported on Wednesday.

In the fifth month of the year, the South American country exported a total of US$ 7,836 million, a drop of 10.8% compared to shipments in the same month of 2022.

The value of exports of copper -the country’s largest shipment- rose 6.9% to US$3.46 billion. Meanwhile, imports reached US$ 6,885 million, a year-on-year decrease of 18.9%.

Lower price, higher production

At first glance, the latest figures for copper in Chile seem to fit the recent narrative of disappointing supply. However, a closer look suggests that production may be improving in the nation with the highest production.

While shipment revenue fell 2.3% in May from April, according to central bank data released Wednesday, the average copper price fell more than 6% over the same period, indicating volumes were likely up.

The year-on-year comparison is even more promising, with revenue up nearly 7% despite a sharp drop in prices.

The data suggests Chilean production may be stabilizing after a series of project delays, mine setbacks and plant maintenance. This information comes to light after monthly data showing a considerable increase in Peruvian production and continued progress from the Congolese giant Kamoa-Kakula.

Stronger mining supplies, coupled with fragile Chinese demand, help explain why warehouse inventories are at seven-month highs.

With information from Bloomberg and Reuters