(Bloomberg) -- The deadly coronavirus that’s rattled markets since January won’t stop copper prices from surging to $3 a pound this year, Chilean Mining Minister Baldo Prokurica said in an interview.

The price of copper, often used as a barometer for the global economy, has dropped about 8% so far in 2020, signaling demand for the metal used in everything from electronics to automobiles has cooled as investors retreat from riskier assets.

Copper supplies at warehouses tracked by the Shanghai Futures Exchange expanded to the highest ever for this time of year as logistical constraints inside China are stopping output from reaching end-users, further pressuring down price for the metal.

Copper prices “should stabilize once the coronavirus passes,” Prokurica said in an interview at the PDAC conference in Toronto. “Nobody has information to say that the coronavirus will last one or two or three months, but SARS, and the like, lasted between two and three months, so we think that is what will happen with the coronavirus.”

On Monday, copper climbed as much as 2.4% in New York to $2.602 a pound, buoyed by the gradual reopening of factories across China and signs of imminent support from central banks to tackle economic fallout from the outbreak.

“I have the impression that the price should be between $3 and something more,” Prokurica said, citing the demand and supply situation and wage negotiations due at mines in Chile as potential factors.

Cochilco, the Chilean copper commission, lowered its price projection to $2.85 a pound from an earlier estimate of $2.90 in January.

Highlights from the interview:

  • No copper cargoes from Chile to China have been suspended and Chilean miners have not seen a reduction of orders from the coronavirus, Prokurica said.
  • Chile’s government is discussing a “better alternative” to a proposed 3% royalty on copper and lithium mining.
  • Codelco plans to tap international markets with a new bond issue in April.

(Updates copper prices in fifth paragraph)

To contact the reporters on this story: Maria Elena Vizcaino in New York at mvizcaino1@bloomberg.net;Esteban Duarte in Toronto at eduarterubia@bloomberg.net

To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, James Ludden, Keith Gosman

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