Copper as a commodity

Copper is a versatile and widely used industrial metal recognized for its excellent electrical conductivity, thermal conductivity, malleability, and corrosion resistance. Here are some key details about copper as a commodity:

Properties and Uses:

• Electrical Applications: Copper is the preferred material for electrical wiring and electronics due to its high electrical conductivity.
• Construction: Used in plumbing, roofing materials, and building construction, often for its durability and aesthetic appeal.
• Industrial Applications: Present in motors, generators, and transformers, as well as in machinery and equipment manufacturing.
• Alloys: Forms many important alloys, including brass (copper and zinc) and bronze (copper with tin or aluminium).
• Anti-Microbial Properties: Copper can kill a wide range of harmful bacteria and viruses upon contact, which is why it's increasingly used in healthcare settings for surfaces like doorknobs, bed rails, and medical equipment
• Recycling Capability: Copper is one of the most recycled metals, with over 80% of copper that has ever been mined still in use today. Recycling copper requires up to 90% less energy compared to primary copper production.

Production:

- Mining: Extracted from ores such as chalcopyrite and bornite, either through open-pit mining or underground mining.

- Refining: The ore is crushed, concentrated, and then subjected to smelting and refining processes to produce pure copper.

- Major producing countries include Chile, Peru, China, the United States, and the Democratic Republic of the Congo.

Market Dynamics:

- Demand Drivers: Economic growth, especially in emerging markets, significantly influences copper demand, especially in construction and electrical sectors. The rise of renewable energy technologies (like solar panels, electric vehicles, and battery storage) also drives demand.

- Supply Chain: Supply can be influenced by geopolitical events, labor strikes, environmental regulations, and technological changes in mining.

Pricing:

- Market Exchanges: Copper is traded on various commodity exchanges, with the London Metal Exchange (LME) being one of the most prominent.

- Prices can be volatile, responding to changes in global economic indicators, inventory levels, and speculative trading.

Environmental Considerations:

- Mining and processing copper can have significant environmental impacts, requiring careful management to reduce waste and emissions.

- Recycling of copper is an important aspect of the market since it can be recycled without loss of properties. Recycled copper typically requires less energy to process compared to raw mining.

Future Trends:

- With increasing focus on renewable energy and electric vehicles (EVs), the demand for copper is expected to rise significantly. Industry experts predict that copper will play a critical role in the transition to a greener economy.

- Innovations in mining technology and recycling processes are also likely to shape the future landscape of copper as a commodity.

Here's our near term outlook on copper futures:

Copper Futures, as you can see from the chart above has given a breakdown in price structure with the price opening with gap down before moving downwards steeply during yesterday’s session. We are expecting the price to move towards 859-62. Before making another run towards downside and reaching our swing target price of 844.80.

Sudhanshu,

A Bhilai-based Finance professional who likes intellectual conversations and spending time in nature.