Copper

Copper weekly special report based On 1.00 Lot Calculation:

COPPER

• COPPER USE: Copper is used in electronics as part of the auto industry, embracing 39% of the total market use. In the new era, copper is used throughout electric vehicles, charging stations and supporting infrastructure because of the metal’s durability, high conductivity and efficiency. Construction (wiring, plumbing, weatherproofing) takes up to 32% of the total use. Transportation equipment accounts for 11% while Consumer and General products account for 10% of the total use.
• LARGEST PRODUCERS: Chile 27%, Peru 10%, China 8%, Congo 8%, USA 6%, while Russia is responsible for 4% of the global copper production.
• LARGEST IMPORTERS: China is the largest copper importer, controlling a little over 30%. Also, China is the largest consumer of refined copper, being responsible for little over 50% of the market.
• COPPER MARKET IN 2023: LOOMING SUPPLY SHORTAGE: Goldman Sachs predicts a 178,000 metric ton deficit in the copper market in 2023.

EVENTS AND FURTHER ANALYSIS:

• RISING DEMAND ON CHINA REOPENING: As one large copper consumer and an economy that had been under COVID restrictions for a long time, China is now expected to fully reopen in early 2023. Its economy is expected to start picking up strength in early 2023. The demand recovery in the property sector will propel the demand for industrial metals. For instance, China’s southern manufacturing hub of Guangzhou plans 1,722 projects in 2023 worth more than 6.5 trillion yuan ($945 billion).
• FALLING SUPPLY AS PERU’S COPPER PRODUCTION POSSIBLY DOWN BY 30% ON POLITICAL UNRESTS: According to the Financial Times, key mines have had to suspend operations. Glencore’s Antapaccay mine, which produced 170,000 tonnes of copper concentrate in 2021, temporarily suspended operations after it was attacked by protesters in late January. On February 1, the massive Las Bambas mine, run by China’s MMG and responsible for nearly 2% of global production, halted output without a restart date because of transport disruption hitting critical supplies. Freeport-McMoRan, which operates Cerro Verde, Peru’s largest copper mine, said in an earnings call two weeks ago that it had reduced ore extraction by 10-15% at the site to about 350,000 tonnes per day in a bid to conserve supplies critical to keeping operations running.
• RECESSION FEARS RECEDE: GOLDMAN SACHS DOES NOT SEE RECESSION IN EUROPE ANYMORE. Economists at Goldman Sachs say they now anticipate a growth rate of 0.6% for the euro area in 2023. Previously, they had predicted an economic contraction of 0.1% for the region.

ANALYST OPINION:

• GOLDMAN SACHS forecasts $5.5 per one pound.
• BANK OF AMERICA forecasts $5.08 per one pound.

PRICE ACTION

• COPPER HAS HAD A DOWNWARD CORRECTION OF AROUND 38% FROM ITS ALL- TIME HIGH OF $5.036 (February, 2022). The copper had fallen to its lowest rate since November 2020 to $3.1285 (July, 2022). Copper was last trading around $4.07, and if a full recovery follows recent all- time highs, the stock could see an upside of around 24%. However, the price could decline further.

Copper, February 9, 2023
Current Price: 4.0700

Example of calculation base on weekly trend direction for 1.00 Lot¹

1. 1.00 lot is equivalent of 10,000 units

2. Calculations for exchange rate used as of 09:00 (GMT) 09/02/2023
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