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<\/a>But the recovery may not be sustainable and the risk of a second Covid-19 wave \u2014 especially in the U.S. and China, the world\u2019s two biggest consumers \u2014 may force downward pressure on copper prices during the coming quarter<\/p>\nThe pandemic caused of thousands of workers in the Chilean copper industry to fall ill resulting in a marked drop in output from Chile, the world\u2019s largest copper producer accounting for over a quarter of global supply. Many mines in South America reduced their labour force and postponed non-essential activities in an attempt to keep workers safe and as a result the world\u2019s No. 2 producer Peru suffered a 40% fall in output in May.<\/p>\n
Eleni Joannides, principal analyst in Wood Mackenzie\u2019s copper team, recently told CNBC that the consultancy was forecasting stronger demand for copper in the second half of this year as economies and industries restarted. However, she noted that question marks remained around the degree to which the economy would bounce back before the end of 2020:<\/p>\n
\u201cThere\u2019s a whole slew of the population out there that is either furloughed, is losing their job or doesn\u2019t know what\u2019s going to happen to their job, so the risk is that they\u2019re not going to be going out into the market buying some of the big ticket items that contain copper, so there\u2019s a concern that whilst demand should, in theory, pick up, it may not pick up to the degree that we expect because people aren\u2019t going to go out there and buy a new car or a new washing machine.\u201d<\/p>\n
Jonathan Barnes, senior copper analyst at Roskill, believes that copper prices will be influenced by continued pressure on supply in the coming quarters. In a recent phone call with CNBC he said it was \u201calmost inevitable\u201d that copper markets would continue to see more disruptions to production this year. The pandemic\u2019s impact on production of newly-mined material was \u201cjust grazing the surface,\u201d he added.<\/p>\n
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