On the demand side, copper is one of the most basic industrial raw materials, and the degree of macroeconomic prosperity basically determines the demand of copper market. Usually, the export data published by the customs every month and the apparent consumption data calculated by (output+net import) are the main indicators to measure the demand situation. In addition, we can roughly judge the strength of demand according to macro indicators such as GDP growth rate, manufacturing index and order index, and measure the actual demand according to the development of terminal consumption fields, such as wire and cable, construction, transportation and other industries. Because China's copper consumption ranks first in the world, and more than 70% of copper resources depend on imports, "China demand" has become an important theme of international capital speculation.
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.
Changes in the development trend of copper industry: consumption is a direct factor affecting copper prices, and the development of copper industry is an important factor affecting consumption. For example, after the 1990s, copper used in pipelines in developed countries increased greatly, and the construction industry became the largest consumer of copper, 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, which has become one of the factors supporting copper prices. In the automobile industry, manufacturers advocate replacing copper with aluminum to reduce the weight of automobiles, thus reducing the amount of copper used in industry.
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. 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. 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. 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 greatly improved. Judging from the evolution of the copper market in the last 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 macro funds, such as arbitrage funds, which are large in scale, ranging from several billion dollars to tens of billions of dollars, and are mainly used for strategic long-term investments. The other is short-term fund, which is managed by CTA (commodity trading consultant). The scale is very small, usually around tens of millions of dollars. Short-term operation depends on technical analysis, so it is also called technical fund.
Although the rise and fall of copper prices may be excessive because of the participation of funds, the overall trend of prices will not violate the fundamentals. 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 fund positions. 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. Crude oil and copper are important international industrial raw materials, and strong demand can best reflect the quality of the economy. So in the long run, the prices of oil and copper 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 a trend. In the short term, the positive correlation between crude oil price and copper price is not very prominent.
London LME copper company
LME is the world's largest copper futures trading market, established in 1876. Trading varieties are copper, aluminum, lead, zinc, nickel and aluminum alloy. The futures trading of copper began at 1877, and there are two kinds of copper traded:
Negative grade copper: Grade A copper
Copper bar: The specification standard is Grade A copper, and the weight is between 1 10- 125 kg.
Among them, the trading of cathode copper is the most active. All delivered copper must have Grade A copper approved by the London Stock Exchange, which conforms to the British BS 6017-1981standard classification specification.
The contract rules for Class A electrolytic copper are as follows:
Contract Quantity Unit: 25 tons
Quotation: USD/ton
Minimum range of price fluctuation: 0.5 USD/ton.
Delivery date: any trading day within three months, and the third Wednesday of each month within three to fifteen months.
Trading time:12: 00—12: 05; 12: 30— 12: 35 (official quotation); 15:30— 15:35; 16: 15— 16:20
There is no price limit for LME.