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Factors Affecting Copper Prices

Copper is one of the oldest metals known to man. It is a favorite source for active traders looking to make speculative bets on where the commodity is headed.

There are four little known factors driving copper and its price.

1. Emerging Market Demand

Copper demand has surged in recent years thanks to urbanization in emerging markets such as China and India.

China is a major copper buyer, and the health of the Chinese economy is a major factor in determining copper prices.

The need for new residential housing, transportation infrastructure, and other construction has climbed, copper could be hit especially hard if new construction slows down.

It may seem somewhat removed from the commodity’s price, keeping an eye on developments in these massive markets would be a best practice for anyone with capital allocated to copper.

Building in China

2. Health of the Homebuilding Industry

The homebuilding industry is a major buyer of copper which is used in pipes, wiring, and other components of residential buildings.

Homebuilding Industry

3. Supply Disruptions

Because a significant portion of global supplies come from South America, supply disruptions in the region can have a major bearing on global prices. Strikes at major copper producing mines are relatively common, and natural disasters—such as earthquakes or landslides—occur from time to time as well. To give you a better idea for just how significant the Southwestern hemisphere is, Chile and Peru combine to account for nearly 40% of the world’s proven reserves and produce around 40% of the world’s supply in a given year. U.S. is still among the top producers in the world, but its output is not nearly that of its southern neighbors.

Copper mine

4. Use of Substitutes

Technological advancements have made possible substitutions of cheaper metals for copper. Technological advancements have made possible substitutions of cheaper metals for copper.

Copper

Keep your eyes peeled concerning manufacturing trends and competing metals.

Copper is everywhere.  Copper scrap include  bare bright wire, tubing, flashing copper, mix copper, copper with tar, roofing copper…

Take a few minutes, gather all of your copper together, and take it down to the scrap yard for copper recycling.

Currently, we can benefiting enormously from it.


 

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