Since last year, the price of copper has been rising steadily. Now the border of Chile, the largest copper producer, is closed, and the tension once again spread, which is expected to add another fire to the price of copper. The expectation of economic recovery is the main factor supporting this round of copper price increase, and copper, as one of the most widely used metals in industry, is used in almost all fields, from wires to batteries and motors. With the rise of copper price, its influence is gradually transmitted along the industrial chain.

The global commodity market has once again encountered a "black swan". Even though the rise has become the key word of copper price in the past six months, this situation is particularly obvious in the last two days. As of the close of local time on the 7th, the copper price of London Metal Exchange (LME) was 898 1.5 USD/ton. The day before, the price of LME copper rose by 3.6%, breaking through the $9,000/ton mark to $9 104/ton, hitting the highest point in two weeks.

The situation of international copper price has also spread to China. On April 8, the A-share market, steel and nonferrous metals sectors showed strength all day, leading the industry sectors. Among them, Anyang Iron and Steel and Jintian Copper had daily limit, while Jiangxi Copper and Tongling Nonferrous once had daily limit.

The reason for the soaring copper price points to Chile, the world's largest copper producer. Prior to this, in view of the grim situation of the epidemic rebound, the Chilean government announced to upgrade a series of epidemic prevention measures, including closing the border from April 5 to May 1 day local time, and strengthening epidemic prevention and control.

Although the Chilean Ministry of Energy and Minerals responded that the closure of the border would not affect the normal operation of mining enterprises, this move by Chile still attracted great attention in the commodity market, and the international copper price rose sharply under the impetus of nervousness. In addition to LME, the New York Mercantile Exchange copper futures prices also hit the biggest increase in six weeks on April 5th.

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Downstream enterprises suffer:

Hu, chief researcher of Sinosteel Economic Research Institute, told reporters that copper has good thermal and electrical conductivity, strong chemical stability, corrosion resistance, easy welding and good ductility. This makes copper widely used in electronics, electric power, energy, petrochemical, machinery, metallurgy and light industry.

As an important industrial raw material, the rise of copper price will be transmitted downstream along the industrial chain. If manufacturing enterprises can't digest the rising costs, they will pass them on to consumers by raising the prices of finished products. Of course, how much the final price of finished products will rise depends on the market structure and the relationship between supply and demand.

In addition, Jiang Shu also mentioned that the rise in copper prices will definitely have some impact on the downstream market, but the current financial market has also given many downstream enterprises the means to deal with it. Even if not all downstream enterprises can hedge their influence through hedging, at least some enterprises will do so. Moreover, in the industrial chain, all levels can gradually digest the price increase, and in the end the situation is not so serious. In addition, technological innovation will also lead to an increase in production capacity, and the pressure will be decomposed through sales.

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