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2006 exports rocket to record high. EU is CODELCO chief importer

Thursday, January 4th 2007 - 20:00 UTC
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Chile's exports – at least in terms of dollar amounts — rose dramatically in 2006, fueled in large part by record high copper prices.

According to the Central Bank (BC), Chile shipped off some US$60 billion worth of goods in 2006, making it by far the most lucrative export year in the country's history. The figure represents an approximately 50 percent increase over 2005 totals. 2006 export sales, moreover, were more than double what they were in 2004. Much of last year's export record can be attributed to sky-high copper prices. Overall, mining products represented 64 percent of all exports. Copper alone made up 57 percent of the export totals and, with prices averaging US$3.05 per pound (up 82.7 percent from 2005), the result was a huge hike in the country's export revenue. In terms of actual quantity, Chile's exports rose by just 6 percent in 2006. "Strong demand from Asia, China in particular, meant that copper prices rose to levels never seen before," Universidad Gabriela Mistral economist Erik Haindl told La Tercera. "This basically explains most of the value increase for 2006 exports." Chile also experienced a value increase last year among industrial exports, up 20 percent compared to 2005. Overall, industrial products represented 28 percent of all exports. Forestry and agriculture products, 4.5 percent of the export total, increased as well â€" by 8 percent. The BC also had good news to report in terms of the country's trade balance. Chile imported some US$36 billion worth of foreign products last year, an 18 percent increase over 2005. That increase was significantly less, however, than the hike in export sales, meaning Chile finished the year with a trade surplus of some US$24 billion â€" another record. Europe is chief importer of CODELCO copper in 2006 Europe replaced Asia the top regional importer of refined Codelco copper in 2006, and is predicted to continue as the main destination for Codelco copper exports in 2007. Largely due to the increasing strength of the Chinese economy, Asia was the chief importer of Chilean copper from 2002 to 2005. Copper exports to the Asian market, principally to China, were a key factor in the record-breaking rise of copper prices on the international market. Despite past October's free trade agreement between China and Chile eliminating a two percent copper tax, China encouraged the use of industrial scrap metal rather than refined copper in 2006. According to Codelco's Vice-President of Commercialization, Roberto Souper, these initiatives have greatly influenced the general decline of refined copper exports to Asia. Souper cited the success of China's scrap metal initiatives as a key factor in future Codelco exports to Asia. Codelco maintains 80 percent of its refined copper production for sale on the international market. Of Codelco's 2007 gross copper exports, Souper predicts 32 percent will be sold to Europe, and 29 percent to Asia. The question of whether China will continue to encourage the use of scrap metal, or return as a major force on the international copper market will greatly influence next years sales to the Asian region. The Santiago Times

Categories: Economy, Latin America.

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