Copper Weekly Special Report based on 1 Lot Calculation:
FUNDAMENTAL FACTORS:
- COPPER’S ESSENTIAL ROLE: Copper is an essential metal with a long history of use in various industries, making it a valuable commodity.
- SUPPLY AND DEMAND DYNAMICS: The price of copper is driven by supply and demand dynamics, and the consensus is that a supply deficit may emerge by 2026 as a result of ESG-related constraints which could drive prices higher.
- RENEWABLE ENERGY TRANSITION: Copper is pivotal to the global transition towards renewable energy, and it plays a key role in the electrification of the global vehicle fleet and the adoption of renewable energy sources.
NEWS AND ANALYSIS
- (APRIL 15, 2024): U.S. AND U.K. BANNED COPPER ON METAL- TRADING EXCHANGES. Washington and London on April 12 prohibited metal-trading exchanges from accepting new aluminum, copper, and nickel produced by Russia and barred the import of the metals to the United States and Britain. The action, aimed at disrupting Russian export revenue from the metals, comes as Washington seeks to punish Moscow for its invasion of Ukraine. Russia is a major producer of aluminum, copper, and nickel. This embargo on Russian raw material supplies to UK and US exchanges further disrupts supply in key trading centers.
- SUPPLY CONSTRAINTS PUT PRESSURE ON COPPER MARKET: Copper prices have risen ~7% in 2024 as a result of factors like reduced output at Ivanhoe Mines, the closure of the Cobre Panama mine, and major Chinese smelters cutting production by 5-10%.
CHINA:
China is the world's largest consumer of copper. The growth in Chinese electric vehicle sales and solar installations, as well as government initiatives, indicate a sustained increase in green demand for copper, which is expected to positively impact copper prices over the long term.
- CENTRAL BANK IN CHINA CUTS RATES TO HISTORIC LOWS (July 22,2024): According to Reuters, he People's Bank of China (PBOC) cut the seven-day reverse repo rate to 1.7% from 1.8%. China cut benchmark lending rates by the same margin at the monthly fixing. The one-year loan prime rate (LPR) was lowered to 3.35% from 3.45% previously, while the five-year LPR was reduced to 3.85% from 3.95%.
- NEW STIMULUS PACKAGE FROM CHINA ($138 BILLION). China’s finance ministry announced plans to raise 1 trillion yuan ($138 billion) through a bond issuance this week to stimulate the sluggish economy. The special government bonds, with tenors of 20 to 50 years, will focus on boosting key sectors like infrastructure, potentially benefiting copper prices.
ANALYST FORECASTS:
- Goldman Sachs: $6.00,
- Citigroup: $5.75,
- Morgan Stanley: $5.25
PRICE ACTION:
- COPPER HAS HIT ITS LOWEST PRICE IN ALMOST FOUR MONTHS ($4.1665).
- COPPER HAS TRADED AROUND 20% BELOW ITS ALL- TIME HIGH OF $5.1952 (May 20, 2024). Copper was last trading around $4.1665, and if a full recovery follows to recent all- time highs, the stock could see an upside of around 25%. However, the price could decline further.
COPPER, July 22, 2024
Current Price:4.1665
|
COPPER |
Weekly |
|
Trend direction |
|
|
5.2000 |
|
|
4.8000 |
|
|
4.4000 |
|
|
3.9500 |
|
|
3.9000 |
|
|
3.8500 |
Example of calculation base on weekly trend direction for 1.00 Lot1
|
Pivot Points |
||||||
|
Profit or loss in $ |
10,335 |
6,335 |
2,335 |
-2,165 |
-2,665 |
-3,165 |
|
Profit or loss in €2 |
9,490 |
5,817 |
2,144 |
-1,988 |
-2,447 |
-2,906 |
|
Profit or loss in £2 |
7,993 |
4,899 |
1,806 |
-1,674 |
-2,061 |
-2,448 |
|
Profit or loss in C$2 |
14,199 |
8,703 |
3,208 |
-2,974 |
-3,661 |
-4,348 |
1. 1.00 lot is equivalent of 10,000 units
2. Calculations for exchange rate used as of 14:00 (GMT+1) 22/07/2024
There is a possibility to use Stop-Loss and Take-Profit.
- You may wish to consider closing your position in profit, even if it is lower than suggested one.
- Trailing stop technique could protect the profit.