According to the principle of supply and demand, when the supply of copper exceeds the demand, the price of copper will fall, and vice versa. One of the most important indicators showing the relationship between supply and demand of copper is copper inventory, which traders must pay attention to. Generally speaking, copper inventory is divided into two types: reported inventory and non-reported inventory. Reported inventory refers to exchange inventory. At present, the largest copper futures exchanges in the world include the London Metal Exchange, the New York Mercantile Exchange and the Shanghai Futures Exchange. All three exchanges regularly announce the inventory of designated warehouses. Non-reporting inventory refers to the inventory held by manufacturers, traders, and consumers worldwide. Since these inventories are not announced regularly, it is difficult to make statistics. Therefore, the exchange inventory is generally used to measure the supply and demand relationship of copper.
2. Global economic climate (important)
Copper is an important raw material, and its demand is related to global economic conditions. When the economy is booming, the demand for copper increases, which drives up the price of copper, and when the economy is in recession, the demand for copper shrinks, which causes the price of beryllium copper to fall. Therefore, investors can observe various economic indicators, such as GDP growth rate and industrial production growth rate, to understand the current state of the global economy, and to analyze the medium and long-term trend of copper prices.
3. Policies of major copper producing and consuming countries
Chile and the United States are the top two producing countries in the world, together accounting for 40% of the world's copper production. The United States' copper is concentrated in the west, and Arizona accounts for 65% of the US production. The United States is the largest consumer of copper, followed by Russia and Japan. These three countries account for about 50% of the world's consumption. Other major consumers include Britain, Germany, and China. These countries' copper import and export or tariff policies will also affect international copper prices.
4. Changes in the development trend of the copper industry
Copper consumption is a direct factor affecting copper prices, while the development of the copper industry is an important factor affecting consumption. In the mid-1980s, the electrical industry accounted for the largest proportion of copper consumption in the United States, Japan, and Western European countries. After entering the 1990s, the use of copper in pipelines in the construction industry increased significantly, becoming the industry with the largest copper consumption. Housing operating rate has become one of the factors affecting machining copper prices, and investors can pay attention to this economic indicator.
5. Copper production cost
With the development of copper smelting, the cost of copper production continues to drop. At present, the average cost of pyrometallurgical copper smelting in the world is 1400-1600 USD/ton, and the cost of hydrometallurgical copper is 800-900 USD/ton. It is expected that the total output of copper hydrometallurgy will increase rapidly in the future, reducing production costs and lowering copper prices.
6. Operational direction of corporate funds
Since legal person funds have more in-depth research on the economic and industrial aspects than ordinary investors, and the direction of their operations is not easy to violate the fundamentals, it is necessary to prejudge the rise and fall of the copper price. You can first observe the number of positions reserved for legal person funds. The relevant data of the short direction will be announced regularly by the exchange, and there is usually a very good correlation between the two.
7. Crude oil price fluctuations will have an impact on copper prices
Crude oil and copper are both internationally important raw materials. Whether their demand is strong or not can best reflect the quality of the economy. Therefore, in the long run, the price of oil and copper is closely related to the speed of economic development. Therefore, there is a certain degree of positive correlation between copper prices and oil prices. Copper traders can refer to the rise and fall of crude oil prices to grasp the price of copper. If a reasonable increase in oil prices indicates that the economy is recovering slowly, then the rise in oil prices will drive up the price of copper. However, if oil prices continue to soar after rising to a reasonable level, investors will turn to concern about the negative impact of oil price surges on future economic development, and even lead to inflation and economic recession. At this time, the rise in oil prices has turned into a negative factor for the copper market. . Therefore, light crude oil futures and copper futures also have joint fluctuations.
8. Exchange rate changes (important)
International copper transactions are generally denominated in U.S. dollars, and international copper prices denominated in U.S. dollars are also affected by exchange rates. However, the fundamental factor that determines the trend of copper prices is the relationship between supply and demand of copper. Exchange rate factors cannot change the basic pattern of the copper market, but only in the short-term. The fluctuation range may have an impact. For short-term operators, it is one of the factors that can be analyzed.