Earthquakes in Chile and Peru: How are they reflected in the copper financial market?

Pablo Tapia-Griñen, Boris Pastén-Henríquez and Jorge Sepúlveda-Velásquez

Finance Research Letters, 2025, vol. 71, issue C

Abstract: A large earthquake is a devastating natural disaster affecting life and infrastructure. Copper, vital for combating climate change, sees over 40% production from Chile and Peru. An earthquake near these mines induces uncertainty, boosting copper prices. After analyzing copper returns after large-magnitude earthquakes (2005–2020) in Chile and Peru, event studies revealed positive abnormal returns. These are intensified by media coverage of the earthquake and available stock, which has a short-lived impact on other metals. This outlook will help investors to hedge and cope with such earthquakes.

Keywords: Copper; Earthquakes; Event studies (search for similar items in EconPapers)
JEL-codes: G11 G12 G15 Q54 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324014582

DOI: 10.1016/j.frl.2024.106429

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