WEEKLY TREND: UP
Fundamental Overview:
Most copper is used in electrical equipment such as wiring and motors. This is because it conducts both heat and electricity very well, and can be drawn into wires. It also has uses in construction (for example roofing and plumbing), and industrial machinery (such as heat exchangers). Car Use: Copper is used throughout electric vehicles as well, charging stations and supporting infrastructure because of the metal’s durability, high conductivity and efficiency.
LIMITED SUPPLY:
CHILE IS THE LARGEST PRODUCER OF COPPER, A COUNTRY WHICH HAS BEEN HARD HIT BY THE COVID PANDEMIC: In 2020, China produced 5.7 million tons of copper, while the second in line, Peru, produced 2.2 million tones. Due to the COVID- 19 pandemic, however, Chile’s copper supply saw declines in the first quarter of 2021, as Chilean miner Antofagasta said that copper production in the first quarter of 2021 fell 5.7% to 183,000 tons from the same period a year ago.
GLOBAL SUPPLY (Total Circa 20 million tonnes): Chile 28.5%, Peru 11%, China 8.5%, Congo 6.5%, USA 6%.
HIGH DEMAND:
US: US INFRASTRUCTURE BILL WORTH TRILLIONS DOLLARS: President Joe Biden outlined a huge $2.3 trillion plan on March 31 to reengineer the nation’s infrastructure. The Biden administration is willing to build roads, railroads and bridges across the US, and copper will be one of the most used raw materials in this process.
CHINA: CHINA IS THE WORLD’S LARGEST IMPORTER OF COPPER (6.68 million tonnes in 2020 (around 33% of global supply): China is expected to import more than 12 million tons of copper in 2021 as their economy continues to recover. The Chinese economy grew by 18.3% in the first quarter of 2021, the highest on record.
ANALYST OPINION (GOLDMAN SACHS/BANK OF AMERICA/CITIGROUP): Wall street banks expected copper prices to continue to rise in the coming period seeing an upside potential of between 20% and 30% due to rising demand and ongoing supply dissipations. They expect copper prices to rise towards 13,000 dollars per tonne. Copper was trading last below 10,000 dollars per tonne in London.
Graph: Copper, Daily
Current Price: 4.2900
|
Copper |
Weekly |
|
Trend direction |
|
|
4.8843 |
|
|
4.7000 |
|
|
4.5200 |
|
|
4.1100 |
|
|
4.0200 |
|
|
3.9000 |
Example of calculation based on weekly trend direction for 1.00 Lot*
|
COPPER |
||||||
|
Profit or loss in $ |
5,943.00 |
4,100.00 |
2,300.00 |
-1,800.00 |
-2,700.00 |
-3,900.00 |
|
Profit or loss in €** |
5,019.85 |
3,463.13 |
1,942.73 |
-1,520.40 |
-2,280.60 |
-3,294.20 |
|
Profit or loss in £** |
4,312.52 |
2,975.15 |
1,668.99 |
-1,306.17 |
-1,959.25 |
-2,830.02 |
|
Profit or loss in C$** |
7,438.02 |
5,131.40 |
2,878.59 |
-2,252.81 |
-3,379.21 |
-4,881.08 |
* 1.00 lot is equivalent of 10000 units
** Calculations for exchange rate used as of 13:10 (GMT+1) 09/07/2021
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Client Manager regarding their use.
*** You may wish to consider closing your position in profit, even if it is lower than suggested one
**** Trailing stop technique can protect the profit – Ask your Client Manager for more details