The relationship between supply and demand directly affects the market pricing of commodities. When the relationship between supply and demand is in a temporary balance, the market price of commodities will fluctuate within a narrow range. When the relationship between supply and demand is unbalanced, the price will fluctuate greatly. In the futures market, an indicator reflecting the change of copper supply and demand is "inventory".
Inventory is one of the important factors affecting copper prices. Under different market conditions, enterprises will take different measures to increase or decrease inventory. In order to ensure the production of raw materials or accelerate the flow of funds, we will also use the throughput reserves in different periods to stabilize the copper market.
Chile is the country with the richest copper resources in the world and the largest copper exporter. Zambia and Zaire in Central Africa are also important copper producers. Almost all the copper they produce is used for export, and their production has a great influence on the international copper market. The political situation in these three countries has been unstable, and labor disputes often occur, which also has a direct impact on copper prices.
Copper has always been an important raw material in the telecommunications industry. However, due to the popularization and application of optical fiber technology, the status of copper cable has been challenged. At the same time, metal materials such as aluminum have the same properties as copper and have replaced copper in most application fields.
As the copper market is an international market with a large volume of international trade, increasing the import and export policies, exchange rate systems and efforts to crack down on smuggling in relevant countries will also have an impact on copper prices.