What is copper trading and copper prices

Political instability can have a direct effect on the price of copper. In 2007, Bolivia nationalized the country’s mining industry, causing severe disruption in the supply and pushing the price higher. Trading copper futures requires paying close attention to market fluctuations and remaining dowmarkets active in developing markets. Because copper can be volatile, neglecting a position for even a short period can be very costly. Kent Thune, CFP®, is a fiduciary investment advisor specializing in tactical asset allocation and portfolio management with a focus on ETFs and sector investing.

Meanwhile, in the copper cathode market, production disruptions and liquidity issues at one of China’s biggest copper traders, Maike Group, led to a short-term supply shortage. China’s copper concentrate imports rose 9.1% on the year over January-August while imports from Kazakhstan surged nearly 74% during the same period, making it the third-biggest exporter to China so far this year. In comparison, copper production only increased 5% on the year over January-August, customs data showed. Supply of clean copper concentrates — which are preferred by Chinese smelters in terms of quality — improved in August, mainly due to delivery default of Chinese trader Ruisheng. The privately-owned company had issues opening letter of credits in August, and numerous suppliers cancelled contracts with them as a result, impacting several prompt-loading and -arrival shipments feed to smelters. We also explore what the next few months could bring, from supply and demand shifts, to new arbitrages, and to quality spread fluctuations.

Freeport-McMoran was also vocal about shortage risks, stating that current low prices do not reflect the tightness in the physical market. LME Copper A Grade futures prices are quoted in dollars and cents per tonne and are traded in lot sizes of 25 tonnes . This exchange provides more opportunities to trade globally in the copper market, which is vital if investors want to be where the majority of copper consumption and movement occurs (i.e. Chile, Peru and China). Currently, LME futures contracts are the second most popular after the COMEX exchange. There is always a demand for copper, so many who trade copper see it as an insurance policy and will use it to hedge against risker trades. Copper futures are widely traded on the London Metal Exchange , at the COMEX and on the Multi-Commodity Exchange in India.

The traded spread between clean and blended concentrates widened to $10-$15/mt TC in September from $3-$5/mt TC in July for Asia-origin blended copper concentrates. Meanwhile, expansion of Kamoa in Congo, Timok in Serbia and Grassberg in Indonesia provided more non-standard copper concentrates for traders to blend. This led to an increase in market size for blended concentrates compared to the last few years. According to USGS data, since 1950 there have always been, on average, nearly 40 years of copper reserves.

• Freeport-McMoran was also vocal about shortage risks, stating that current low prices do not reflect the tightness in the physical market.
• Make sure you are ahead of every market move with our constantly updated economic calendar.
• In 2020, the countries that had a largest trade value in imports than in exports of Raw Copper were China ($5.33B), Switzerland ($2.3B), India ($1.02B), Belgium ($844M), and Singapore ($650M).
• You can do this by opening a position to ‘buy’ copper if you think the price will increase, or a position to ‘sell’ copper if you think it will decline.

We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. Copper is a base metal that is known for being soft, malleable, ductile and highly conductive of both heat and electricity. Due to these properties, it’s widely used in industrial processes across a diverse range of sectors. Europe is the second largest copper consumer, after China, and slower business activity has had an immediate effect on demand for the metal.

Copper trading hours will depend on the opening times of the metal exchange on which you are trading. There are a variety of trading strategies that you can employ depending on your personal preferences and knowledge of technical indicators. But broadly speaking, copper trading strategies will depend on whether the market is trending or consolidating.

Copper futures also provide the ability to trade with greater leverage and allow a more efficient use of trading capital. However, trading leveraged products like copper futures also involves the risk that losses can exceed the amount originally invested and may not be suitable for all investors. NYMEX copper futures trading takes place through the Commodity Exchange division in units of 25,000 pounds, and contract prices are quoted in dollars and cents per pound. This exchange also provides another copper futures contract that represents 12,500 pounds of copper. Prices are updated on a continual basis, giving real-time quotes and market activity for traders.

Consumers and producers of copper can manage copper price risk by purchasing and selling copper futures. Copper producers can employ a short hedge to lock in a selling price for the copper they produce while businesses that require copper can utilize a long hedge to secure a purchase price for the commodity they need. The rapid growth in China, India, Brazil and others in recent decades has increased the demand for copper significantly. Copper traders should keep an eye on the performance of emerging markets, in particular their ability to keep up their growth rate.

Copper Futures Contract Specifications

In this guide we explore regulated copper brokers, different ways to trade, and the reasons why people trade copper. Learn more about futures and the unique advantages of futures trading. If approved, your data will then be publically viewable on this article. Please confirm you understand and are happy with this and our privacy policy by ticking this box.

While in periods of economic downturn, the price of copper is low as there is less money being spent on infrastructure growth. 74% of retail client accounts lose money fxtm review 2021 when trading CFDs, with this investment provider. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

As copper demand increases, world copper stores will gradually deplete, in turn, making copper a rarer metal. While precious metals like gold and silver are considered a store of value, copper’s value lays in its wide range of practical uses. The global demand for copper, combined with the economic and home foreclosure crisis, is creating numerous opportunities for copper-theft perpetrators to exploit copper-rich targets. Organized copper theft rings may increasingly target vacant or foreclosed homes as they are a lucrative source of unattended copper inventory. Within those two primary methods, there are multiple ways to invest in the metal, including physical copper, futures, stocks, ETFs, and mutual funds.

Between 74-89% of retail investor accounts lose money when trading CFDs. The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. , offers investment services and products, justforex including Schwab brokerage accounts. Its banking subsidiary, Charles Schwab Bank, SSB , provides deposit and lending services and products. Access to Electronic Services may be limited or unavailable during periods of peak demand, market volatility, systems upgrade, maintenance, or for other reasons.

Alternative Metals To Copper

To learn more about copper’s qualities as a metal, how it’s produced, and which countries lead copper production, see this Copper Commodity Guide. Traders profit in options trading when the price increases enough to compensate the trader for the initial premium paid. In exchange for higher leverage and higher potential payouts, options traders pay a premium to own the option. To get a better idea of how copper futures work, see this explanation of leverages and margins. The value of a CFD is the difference between the price of copper at the time of purchase and the price at the time of closing the trade. One way to trade copper is through contracts-for-difference , a derivative instrument.

Still, copper futures remain over 12% up since the start of November, supported by expectations of higher industrial activity in China and looming supply concerns. Beijing trimmed the quarantine time for individuals in contact with Covid infections despite rising cases, raising hopes that further reopening measures could follow. On the supply side, commodity trader Trafigura warned that global copper stocks have fallen to record lows, with current inventories enough to supply world consumption for just 4.9 days.

Four steps to trading copper

Copper – data, forecasts, historical chart – was last updated on November of 2022. For example, copper was rangebound for the entire month of May 2018, between $2.95 and $3.21, due to trade tension between the US and China. As copper becomes more expensive, cheaper metals, such as aluminium, are being used instead of copper in power cables and electrical equipment. Other base metals, including nickel, lead and iron, are also used as substitutes for copper in some industries. Environmental concerns and limitations on land usage may keep the imbalance in place for years to come. It would be difficult to imagine building any significant industrial infrastructure without it.

Copper, like silver and gold, is very ductile and conducts electricity, which makes it extremely useful. But unlike precious metals, copper is available in greater quantities, is cheaper and is not considered valuable enough to be used for currencies. Copper is a practical commodity with high industrial demand, but there are other metals that commodity traders keep an eye on.

What are Copper Futures?

28% of global copper output, which makes it the largest copper producer in the world. Shandong Guorun smelter also plans to shut an existing 100,000 mt/year production line in December as it prepares to start up a new production line in 2023. A smelter source said that some traders have utilized 80% of quota in the first half of the year, which means traders can only deliver more clean concentrates through term contracts for the rest of the year.

Copper consumption increased by 8 percent in 2010 throughout Asia, for example. The demand has continued to climb throughout the world in recent years. Sign up for a live trading account or try a free demo trading account to experience a real trading environment. Learn how to trade gold online, with reliable execution speeds and competitive spreads. Historically, Copper reached an all time high of 5.02 in March of 2022.

Futures trading at Schwab

The two funds are the only distinct copper ETFs that trade in the United States, excluding inverse or leveraged funds as well as those with under $50 million in assets under management . These ETFs track the price of copper and do not invest in copper mining companies. The risks of loss from investing in CFDs can be substantial and the value of your investments may fluctuate. You should consider whether you understand how this product works, and whether you can afford to take the high risk of losing your money.