Cooper

Copper is a red metal and believed to be the first metal used by humans. Today, copper is widely used in industrial purposes to produce a large number of objects every day, including electric wires, microwave ovens and home heating systems.

Unlike gold, silver and platinum, copper is available in larger quantities in nature, and the cost of extracting less, not seen as a coin. Large-scale industrialization in the developing world has led to higher copper production since 2011.

Due to its use in a variety of industries, the copper price often used as a measure of the performance of the global economy. That is why you might hear traders calling him Dr. Copper. Given this strong position in the global economy, let us look at the unique features of the copper trading market, the factors that influence its price and how traders can benefit from those characteristics.

The main characteristics of copper:

  1. The most important copper producer:

    About 20 million tons of copper extracted annually from a number of countries around the world. The following are the most important copper producing countries:

    • Australia
    • Canada
    • Congo
    • Peru
    • Chile
  2. The most important consuming country for copper:

    The copper-consuming countries, which therefore play an important role in determining demand and price levels:

    • China
    • Russia
    • United States
    • Europe
    • Japan
  3. Recycling:

    Copper is a metal that is recycled regularly. About 10% of global copper supplies come from recycling.

What are the factors affecting copper prices?

Given the widespread use of copper in the economy and the large number of countries involved, it may seem difficult to identify factors that have a significant impact on the price of copper. To help traders understand why copper markets are moving, we detail these factors in four main categories.

  1. Demand for Copper in Emerging Countries Emerging

    Markets with fast-growing economies are key drivers of copper prices. The growth witnessed by China, India and Brazil in recent decades has led to a significant increase in demand for copper. The main indicator to follow by copper traders is the performance of these countries and their ability to continue their growth rates.

  2. Uncertainty regarding the supply of copper

    When it comes to copper, political instability can have a direct impact on price. Let us take South America for example, as a major copper mining area. In 2007, the President of Bolivia decided to nationalize the mining industry in the country, causing a reduction in the supply of copper and raising the price.

  3. US Housing Market

    Since copper is widely used in home construction, and due to the large size of the US housing market, these factors have made the US economy a major indicator to follow in copper trading. Traders looking for factors that influence the price of copper should follow some important reports such as the Gross Domestic Income Report and the Non-Farm Payrolls Report of the United States.