Copper

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.
• 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.

SUPPLY SIDE:

• TOP COPPER PRODUCERS: The biggest producers of copper are: Chile (27% of world total), China (8%), Peru (8%), Democratic republic of Congo (6%), Australia (5%), Mexico (5%), Russia (3%), and Canada (2%).
• SUPPLY DISRUPTIONS: Supply instability translates to higher prices of copper. Almost all producer countries have one or more of the following supply disruptions: labor strikes, environmental regulations and hazards, political challenges, poverty and bad infrastructure, and government instability. This is especially true for Chile, which is host to the biggest copper production and the biggest instability in output.
• SUPPLY GROWTH: The output growth of copper is around 1-2%, doubling the supply market, on average, every 72 years.

DEMAND SIDE:

• TOP COPPER CONSUMERS: The biggest consumers of copper are: China (52% of the world’s total), the United States (7%), The European Union (8%), and Japan (4%).
• TOP COPPER INDUSTRIES: Copper is heavily demanded in the EV industry, renewable energy industry (wind and solar farms), electrical infrastructure, telecommunications, and construction. The EV and green industries show the biggest growth rates (10-15% and 5%, respectively) and will push the overall copper growth rate even higher in the future.
• DEMAND GROWTH: Historically, global copper demand has grown at a rate of around 2%-3% annually, doubling the demand for copper, on average, every 36 to 24 years. As it stands, demand will far outpace supply in the coming decades.

CHINA STIMULUS:

• CHINA ANNOUNCED MORE STIMULUS: A stimulus package could translate into higher economic activity which could cause increased demand for copper. The government report outlined plans to issue $178.9 billion in special treasury bonds in 2025, and another $69 billion worth of special treasury bonds will be issued to support large state-owned banks. The fiscal package also includes the issuance of $600 billion of local government special-purpose bonds.

EVENTS:

• MONDAY, MARCH 31, AT 01:30 GMT: CHINA MANUFACTURING PURCHASING MANAGERS INDEX (PMI) (MARCH): A reading higher than 50 indicates expansion in the sector, while under 50 indicates a contraction. A higher-than-expected reading should be taken as positive for the price of copper. This data provides an early indication each month of economic activities in the Chinese manufacturing sector. Data for February showed an increase to 50.2 from January’s 49.1, beating analysts’ estimates for 50.

OTHER NEWS:

• INTERNAL CONFLICTS IN DR CONGO - THE WORLD’S THIRD LARGEST COPPER PRODUCER: Any instability in a producer country has a potential to drastically reduce supply and increase the price of copper. Currently the country is embroiled in a bitter civil war with the affected region in the south – Katanga region being the most copper rich region with significant investments in copper mining by companies such as Glencore and China Molybdenum.

ANALYSTS OPINION:

• GOLDMAN SACHS SEES COPPER PRICE BETWEEN $5 and $5.50: Goldman Sachs expects a deficit of 180.000 tones in 2025 and 250.000 tons in 2026.

COPPER, March 18, 2025
Current Price: 4.9900

Example of calculation based on weekly trend direction for 1.00 Lot¹

COPPER

1. 1.00 lot is equivalent of 10,000 units

2. Calculations for exchange rate used as of 13:00 (GMT) 18/03/2025

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.