Spot copper, as a commodity, has high market maturity, financial and commodity attributes, and is closely related to the macroeconomic index. It is a favorite trading commodity for domestic and foreign investors.
With the development of spot investment market, spot copper investment has been accepted by more and more investors. Any fluctuation of copper price has a great influence on investors in spot copper, so it is very important to judge the trend of copper price. This paper will introduce several main factors that affect the copper price, hoping to help investors in spot copper judge the trend of copper price.
How to judge the trend of copper price?
First, judge the price trend of copper according to its production cost.
Production cost is the basis of measuring commodity price level. The production cost of copper includes smelting cost and refining cost, which is also an important factor affecting copper price. The calculation of copper production cost is different in different mines. The most common economic analysis is to adopt "cash flow guarantee cost", which decreases with the increase of by-product value. After 1990s, the production cost showed a downward trend.
At present, the average comprehensive cash cost of internal combustion copper smelting is about 62 cents/pound, and the average cost of wet smelting is about 40 cents/pound. At present, the output of copper hydrometallurgy accounts for about 20% of the total output. The calculation of domestic production cost is different from that in the world.
Second, judge the price trend of copper according to the relationship between supply and demand of copper.
According to the principle of microeconomics, when the supply of a commodity exceeds the demand, its price falls, and vice versa. At the same time, copper prices will affect supply and demand in turn, that is, when copper prices rise, supply will increase and demand will decrease; on the contrary, demand will increase and supply will decrease, so price and supply and demand will affect each other.
An important indicator reflecting the relationship between supply and demand is inventory. The inventory of copper is divided into reported inventory and non-reported inventory. Reported inventory, also known as "explicit inventory", refers to the inventory of the exchange. At present, London Metal Exchange (LME), COMEX Branch of the New York Mercantile Exchange (NYMEX) and Shanghai Futures Exchange (SHFE) are internationally influential copper futures trading institutions. All three exchanges regularly publish the inventory of designated warehouses.
Unreported inventory, also known as "hidden inventory", refers to the inventory held by manufacturers, traders and consumers all over the world. Because these inventories are published irregularly, it is difficult to make statistics, so they are generally measured by exchange inventories.
Third, judge the trend of copper price according to the policies of major copper producing and consuming countries.
Chile and the United States are the top two copper producers in the world, accounting for 40% of the world's copper production. Copper in the United States is concentrated in the west, and Arizona accounts for 65% of the national output. The United States is the largest copper consumer, followed by Russia and Japan, accounting for about 50% of the world's consumption. Other major consumers are Britain, German and China. The copper import and export or tariff policies of these countries will also affect the international copper price.
Fourth, judge the trend of copper price through the change of exchange rate.
International copper transactions are generally denominated in dollars, and the international copper price denominated in dollars will also be affected by the exchange rate. However, the fundamental factor that determines the trend of copper price is the relationship between supply and demand. The exchange rate factor cannot change the basic pattern of the copper market, and may only affect the short-term fluctuation range. For short-term operators, it is one of the factors that can be analyzed.
5. Determine the trend of copper price according to the development trend of copper industry.
The consumption of copper is a direct factor affecting the price of copper, and the development of 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 amount of copper used in pipelines in the construction industry has greatly increased, becoming the largest industry. Therefore, the housing operating rate in the United States has become one of the factors affecting copper prices, and investors can pay attention to this economic indicator.
As an important metal raw material, the demand for copper is positively related to the global economy. Spot copper investors can also judge the trend of copper prices according to the development of the global economy, and then adjust their investment strategies.