Copper Weekly Special Report based On 1 Lot Calculation:
FUNDAMENTAL FACTORS:
- COPPER’S ESSENTIAL ROLE: Copper is an essential metal with a long history of use in various industries, making it a valuable commodity.
- SUPPLY AND DEMAND DYNAMICS: The price of copper is driven by supply and demand dynamics, and the consensus is that a supply deficit may emerge by 2026 as a result of ESG-related constraints which could drive prices higher.
- RENEWABLE ENERGY TRANSITION: Copper is pivotal to the global transition towards renewable energy, and it plays a key role in the electrification of the global vehicle fleet and the adoption of renewable energy sources.
NEWS AND ANALYSIS
- COPPER HITS ALL-TIME HIGH (MAY 20): Copper hit another all-time high of $5.1959 as market concerns grow over global supply shortages.
- (APRIL 15, 2024): U.S. AND U.K. BANNED COPPER ON METAL- TRADING EXCHANGES. Washington and London on April 12 prohibited metal-trading exchanges from accepting new aluminum, copper, and nickel produced by Russia and barred the import of the metals to the United States and Britain. The action, aimed at disrupting Russian export revenue from the metals, comes as Washington seeks to punish Moscow for its invasion of Ukraine. Russia is a major producer of aluminum, copper, and nickel. This embargo on Russian raw material supplies to UK and US exchanges further disrupts supply in key trading centers.
- SUPPLY CONSTRAINTS PUT PRESSURE ON COPPER MARKET: Copper prices have risen ~36% in 2024 as a result of factors like reduced output at Ivanhoe Mines, the closure of the Cobre Panama mine, and major Chinese smelters cutting production by 5-10%.
CHINA:
China is the world's largest consumer of copper. The growth in Chinese electric vehicle sales and solar installations, as well as government initiatives, indicate a sustained increase in green demand for copper, which is expected to positively impact copper prices over the long term.
- NEW STIMULUS PACKAGE FROM CHINA ($138 BILLION). China’s finance ministry said on Monday that it plans to start raising 1 trillion yuan ($138 billion) through a long-awaited bond issuance this week. The issuance is aimed chiefly to stimulate key aspects of China’s sluggish economy, and will entail the issuance of special government bonds with tenors of 20 to 50 years. Chinese ministers said the bonds will be used to shore up sluggish economic growth, and will be deployed towards key sectors including infrastructure which could benefit Copper prices.
- MOST RECENT ECONOMIC DATA IN CHINA (APRIL):
- Exports in April rose by 1.5%, exceeding analysts’ expectations for an increase of 1.0%.
- Imports rose by 8.4%, beating analysts’ expectations for an increase of 5.4%.
- Inflation came out at 0.3%, up from the previous 0.1%.
- Q1 2024 GDP data also beat expectations, coming in at 5.3%. (Expected: 5.2%)
- Industrial Production in April rose 6.7% exceeding expectations of 5.5%.
ANALYST FORECASTS: Goldman Sachs: $6.00, Citigroup: $5.75, Morgan Stanley: $5.25
Copper, May 20, 2024
Current Price: 5.08
|
Copper |
Weekly |
|
Trend direction |
|
|
6.00 |
|
|
5.70 |
|
|
5.40 |
|
|
4.76 |
|
|
4.73 |
|
|
4.70 |
Example of calculation based on weekly trend direction for 1 Lot1
|
|
||||||
|
Profit or loss in $ |
9,200.00 |
6,200.00 |
3,200.00 |
-3,200.00 |
-3,500.00 |
-3,800.00 |
|
Profit or loss in €² |
8,463.54 |
5,703.69 |
2,943.84 |
-2,943.84 |
-3,219.83 |
-3,495.81 |
|
Profit or loss in £² |
7,242.75 |
4,880.99 |
2,519.22 |
-2,519.22 |
-2,755.40 |
-2,991.57 |
|
Profit or loss in C$² |
12,524.60 |
8,440.49 |
4,356.38 |
-4,356.38 |
-4,764.79 |
-5,173.21 |
1. 1 lot is equivalent of 10,000 units
2. Calculations for exchange rate used as of 10:30 (GMT+1) 20/05/2023
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Senior Account ManagerClient 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 Senior Account ManagerClient Manager for more details