Supply and demand factors
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. London Metal Exchange (LME), COMEX Branch of the New York Mercantile Exchange (NYMEX) and Shanghai Futures Exchange (SHFE) are more influential in the world copper futures trading. 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.
International and domestic economic situation
Copper is an important industrial raw material and its demand is closely related to the economic situation. 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.
When analyzing macro-economy, two indicators are very important, one is economic growth rate, or GDP growth rate, and the other is industrial production growth rate.
Production cost of copper
Production cost is the basis of measuring commodity price level. The production cost of copper includes smelting cost and refining cost. 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. The average comprehensive cash cost of pyrometallurgical copper smelting in western countries is about 70-75 cents/pound, and the average cost of hydrometallurgical copper smelting is about 45 cents/pound. 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.