1. Supply and demand
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, prices affect supply and demand in turn, that is, when prices rise, supply increases and demand decreases, and vice versa. This basic principle fully reflects the internal relationship between price and supply and demand.
Usually, the inventory change of copper futures traded in futures exchange is an important reference index to observe the change of copper supply and demand. The futures exchanges that have great influence on the market mainly include Shanghai Futures Exchange (SHFE), London Metal Exchange (COMEX) and the New York Mercantile Exchange.
2. Macroeconomy
Copper is an important industrial basic raw material, and its demand change is closely related to economic growth. When the economy grows, the demand for copper increases, thus pushing up the price of copper. When the economy is depressed, the demand for copper shrinks, which pushes the price of copper down.
Under normal circumstances, the market will take economic growth rate, industrial production growth rate (added value) and related monetary and industrial policies as important analytical basis for changes in the macroeconomic situation.
3. The trading direction of the fund
Although the fund industry has a long history, it didn't flourish until the 1990s. At the same time, the fund's participation in commodity futures trading has also been greatly improved. Judging from the evolution of the copper market in the past decade, funds have played a role in fueling many big markets.
Funds are large and small, and their operation methods are quite different. Generally speaking, funds can be divided into two categories. One is Macrofund, such as arbitrage fund, which is large in scale, ranging from several billion dollars to tens of billions of dollars, and is mainly used for strategic long-term investment. The other is short-term fund, which is managed by CTA (commodity trading consultant). The scale is small, usually in the tens of millions of dollars, because it relies on technical analysis for short-term operations, also known as technology funds.
Judging from the changes of COMEX's copper price and non-commercial positions (generally considered as speculative positions of funds), there is a very good correlation between the rise and fall of copper price and the positions of funds. Moreover, because the fund has a deeper understanding of macro fundamentals and a "foresight", understanding the trend of the fund is also the key to grasping the market. Judging from the trend of copper prices in recent years, especially since 2005, capital is a huge driving force for the rapid and sharp rise of copper prices.
4. The price fluctuation of oil and other related commodities will also affect the copper price.
Crude oil and copper are important international industrial raw materials, and strong demand can best reflect the quality of the economy. Therefore, in the long run, oil prices and copper prices have a good correlation with the speed of economic development. Because both crude oil and copper are closely related to macro-economy, there is a positive correlation between copper price and oil price to some extent. But this is just the same trend. In the short term, the positive correlation between crude oil price and copper price is not very prominent.
5. Changes in the development trend of copper industry
It is a direct factor affecting copper price, and the development of copper industry is an important factor affecting consumption. For example, after the 1990s, the consumption of pipeline copper in the construction industry in developed countries increased greatly, and the construction industry became the largest copper consumption industry, which promoted the rise of international copper prices in the mid-1990s. The housing operating rate in the United States also became one of the influencing factors of copper prices. Since 2003, the development of real estate and electricity in China has greatly promoted the growth of copper consumption and become one of the factors supporting copper prices. In the automobile industry, manufacturers advocate replacing copper with aluminum to reduce the weight of vehicles, thus reducing the amount of copper in the industry. In addition, with the rapid development of science and technology, the application scope of copper is also expanding, and copper has begun to play a role in medicine, biology, superconductivity, environmental protection and other fields. IBM has used copper instead of aluminum in silicon wafers, which marks a breakthrough in the application of copper in semiconductor technology. These changes will affect the consumption of copper to varying degrees.
6. Exchange rate fluctuations
Copper is a highly liquid commodity. In international trade, when it is usually denominated in US dollars, the exchange rate change of the local currency of non-US dollar countries against US dollars will directly affect the cost and profit of copper trade, and then the change of trade activities will lead to the change of supply and demand, which will lead to the fluctuation of copper prices.
7. Import and export tariffs
Import and export policy, especially tariff policy, is an important means to balance domestic supply and demand by adjusting import and export costs and controlling import and export volume of commodities. According to the tariff implementation plan of the General Administration of Customs in 20 12, the import of high-purity cathode copper is subject to zero preferential tariff rate, and the nominal tariff rate of high-purity cathode copper export is 10%. 20 13 to 10/month 1, in the tariff implementation of 20 13, increase 99.9999% of high-purity copper, and cancel the original provisional export tax rate of 5%.
8. Production cost of copper
Production cost is the basis of measuring commodity price level. When the copper price is lower than the production cost of copper for a long time, it will often lead to a sharp reduction in production of copper, mining and smelting enterprises, thus changing the relationship between supply and demand in the market and leading to a sharp fluctuation in copper prices.