MercoPress. South Atlantic News Agency

Copper price boom helps Chile.

The Chilean government Copper Committee, Cochilco, has increased this year's estimates for the red metal that will now stand in a range of 126 to 130 US cents the pound.

The new values, which are vital for Chilean finances since copper is the country's main export, have been pushed by a bullish demand and a greater world economy expansion led by China.

Patricio Cartagena Díaz, vicepresident of Cochilco said the previous price range stood at 92 and 96 US cents per pound, and revealed that this year Chile will be producing 5,48 million metric tons of fine metal, 11,7% above 2003, although just below the estimate of last December, 5,49 million tons.

"The fundamentals of this projection are the strong surge in copper prices during the first quarter of 2004, which actually began towards the end of 2003, and are the highest since August 1995", said Mr. Cartagena Díaz.

During the first quarter of this year price of copper jumped almost 24%.

China, followed by the recovery of the United States and Japanese economy, number two and three world consumers, have fuelled world demand, added the Chilean official.

However Mr. Cartagena Díaz pointed out that financial markets have also influenced the strong recovery of the copper price.

"Depreciation of the US dollar vis-à-vis other main currencies, Euro and Yen, have made metals, particularly copper, a hedge option for monetary fluctuations".