According to the principle of supply and demand, when copper supply exceeds demand, its copper price falls, and vice versa. One of the most important indicators of copper supply and demand is copper inventory, which traders have to pay attention to. Generally speaking, the inventory of copper is divided into reported inventory and non-reported inventory. Declared inventory refers to the inventory of the exchange. At present, there are the largest copper futures exchanges in the world, including London Metal Exchange, the New York Mercantile Exchange Futures Exchange and Shanghai Futures Exchange. All three exchanges regularly publish the inventory of designated warehouses. Unreported inventory refers to the inventory held by manufacturers, traders and consumers all over the world. Because these stocks are not published regularly, it is difficult to make statistics, so the relationship between supply and demand of copper is generally measured by exchange stocks.
2. Global economic prosperity
Copper and zinc are important raw materials, and their demand is related to the global economic situation. When the economy is booming, the demand for copper increases, which drives the price of copper and zinc to rise. When the economy is depressed, the demand for copper and zinc shrinks, driving the price of copper down. Therefore, investors can observe various economic indicators, such as GDP growth rate, industrial production growth rate, etc., understand the current global prosperity, and then analyze the long-term fluctuation trend of copper and zinc prices.
3. Policies of major copper and zinc producers and consumers
Chile and the United States are the top two producers in the world, accounting for 40% of the world's copper and zinc production. Copper and zinc in the United States are concentrated in the west, and Arizona accounts for 65% of the national output. The United States is the largest consumer of copper and zinc, followed by Russia and Japan, accounting for about 50% of the world's consumption. Other major consumers are Britain, German and Chinese mainland. The import and export or tariff policies of copper and zinc in these countries will also affect the international copper price.
4. Changes in the development trend of copper and zinc industries
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.
5. Production cost of copper
With the development of copper smelting, the production cost of copper is decreasing. At present, the international average cost of copper smelting by internal combustion method is 1400- 1600 USD/ton, and the cost of copper smelting by wet process is 800-900 USD/ton. It is predicted that the total output of copper hydrometallurgy will increase rapidly in the future, reducing production costs and depressing copper prices.
6. The operation direction of the company's funds
Because corporate funds have more in-depth research on economy and industry than ordinary investors, their operation direction is not easy to violate the fundamentals. Therefore, to judge the rise and fall of copper prices in advance, we can first observe the direction of the positions of corporate funds, and the relevant data will be published regularly by the exchange, usually there is a very good correlation between them.
7. The fluctuation of crude oil price will have an impact on copper price.
Crude oil and copper are both important raw materials in the world, and strong demand can best reflect the quality of the economy. Therefore, in the long run, the level of oil price and copper price is closely related to the speed of economic development. Therefore, copper prices and oil prices are positively correlated to some extent. Copper traders can refer to the rise and fall of crude oil prices to grasp the price of copper. If a reasonable rise in oil prices indicates a slow economic recovery, then the rise in oil prices will drive up copper prices. However, if the oil price rises to a reasonable level and continues to soar, investors will turn to worry that the soaring oil price will have a negative impact on future economic development, and even lead to inflation and economic recession. At this time, the rise in oil prices has become a negative factor in the copper market. Therefore, light crude oil futures and copper futures also have joint fluctuations.
8. Exchange rate changes
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.