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December 4, 2020
The factors affecting copper prices include supply, demand, bulk commodity spot sales, market pressure, and current inventory levels etc.,
1. Supply and demand
According to the principle of economics, when the supply of a commodity exceeds the demand, its price will fall, otherwise it will rise. At the same time, price will affect supply and demand in turn. When commodity prices rise, supply will increase and demand will decrease. On the contrary, demand will rise and supply will decrease. Therefore, price and supply and demand will affect each other.
An important index reflecting the relationship between supply and demand is inventory, which is generally measured by stock exchange.
2. economic situation
Copper is an important industrial raw material, and its demand is closely related to the economic situation. When the economy grows, the copper demand increases, which leads to the rise of copper price. When the economy is depressed, the copper demand shrinks and the copper price falls.
3. Import and export policy
The import and export policy, especially the tariff policy, is an important means to balance the domestic supply and demand by adjusting the import and export cost of a commodity and controlling the import and export volume of a commodity.
4. Change of development trend of copper industry
Consumption is the direct factor affecting copper price, and the development of copper industry is an important factor affecting consumption. With the rapid development of science and technology, the application scope of copper is constantly expanding, and copper has begun to play a role in the fields of medicine, biology, superconductivity and environmental protection. All of these will affect copper consumption in varying degrees.
5. Production cost of copper
Production cost is the basis of measuring commodity price level. The production cost of copper includes smelting cost and refining cost. The most common economic analysis is to adopt "cash flow break even cost", which decreases with the increase of by-product value.
6. Trading direction of funds
Although the fund industry has a long history, it did not develop vigorously until the 1990s. At the same time, the degree of fund participation in commodity futures trading has also increased significantly. From the evolution of copper market in recent ten years, the fund has played an important role in many big market.
Of course, there are also similar exchange rates will have a certain impact on copper prices, but the fundamental factor determining the trend of copper prices is the relationship between supply and demand of copper