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Copper

Market Opportunities - 07/06/2021

07 June, 2021

The example below uses Contracts For Difference (CFDs). Calculations are only on the price of the specific instrument on the date below and calculations indicate a possible opportunity for profit or loss. No representation or warranty is given as to the accuracy or completeness of this information, consequently any person acting on it does so entirely at their own risk.

Copper weekly uptrend opportunity based On 1.00 Lot Calculation:

  • 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. Copper is used throughout electric vehicles, charging stations and supporting infrastructure because of the metal’s durability, high conductivity and efficiency. Fitch Solutions’ automotive team forecasts global vehicle production growth to reach 7.4% year-on-year this year.
  • LIMITED SUPPLY: CHILE IS THE LARGEST PRODUCER OF COPPER, A COUNTRY WHICH HAS BEEN HARD HIT BY THE COVID PANDEMIC: In 2020, Chile produced 5.7 million tons of copper, while the second in line, Peru, produced 2.2 million tones. Total copper produced in 2020 was around 20 million tons.
    Chile’s copper production fell 2.2% year on year, to 1.4 million tonnes, in the first quarter of 2021.
    GLOBAL SUPPLY (Total Circa 20 million tonnes in 2020): Chile 28.5%, Peru 11%, China 8.5%, Congo 6.5%, USA 6%.
  • CHILE STRIKE: Workers at BHP Group’s (Escondida and Spence Mine) remote operations center in top copper producer Chile rejected the company’s latest wage offer and began a strike on Wednesday (May 26). Combined, Escondida and Spence account for almost 20% of annual copper output in Chile (5.7% of total global supply: around 1.14 million tonnes).
  • HIGH DEMAND: CHINA IS THE WORLD’S LARGEST IMPORTER OF COPPER: China could be expected to import more than 12 million tons of copper in 2021 as their economy continued to recover. The Chinese economy grew by 18.3% in the first quarter of 2021, the highest on record.
  • HIGH DEMAND: US INFRASTRUCTURE BILL WORTH 2.3 TRILLION 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 material in this process.
  • 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 around 10,000 dollars per tonne in London.

Copper, June 7, 2021
Current Price: 4.4642

Copper

Weekly

Trend direction

UP

Resistance 3

5.0000

Resistance 2

4.8200

Resistance 1

4.6500

Support 1

4.3200

Support 2

4.2500

Support 3

4.2000

Example of calculation base on weekly trend direction for 1.00 Lot*

COPPER

Pivot Points

Resistance 3

Resistance 2

Resistance 1

Support 1

Support 2

Support 3

Profit or loss in $

5,358.00

3,558.00

1,858.00

-1,442.00

-2,142.00

-2,642.00

Profit or loss in €**

4,405.13

2,925.24

1,527.57

-1,185.55

-1,761.06

-2,172.14

Profit or loss in £**

3,781.25

2,510.96

1,311.23

-1,017.65

-1,511.65

-1,864.52

Profit or loss in C$**

6,466.20

4,293.90

2,242.29

-1,740.25

-2,585.03

-3,188.44

* 1.00 lot is equivalent of 10000 units
** Calculations for exchange rate used as of 13:30 (GMT+1) 07/06/2021
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

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