Copper is a compound metal that is a reddish brown in colour. It is considered to be the oldest known commodity that has a bearing on the worldwide economy. Copper is a highly conductive metal that is also highly malleable, and it is also possesses anti-bacterial qualities. Furthermore, it does not corrode. It occurs naturally in various minerals that can be mined, and is frequently employed as a component in a number of metal alloys, such as brass and bronze. Copper is available in a number of deliverable grades, and high grade copper futures contracts are traded under the ticker symbol of HG.
The copper commodity has a number of appealing features. As the copper commodity price is so closely tied to the state of the economy, global economic recovery can be a clear signal that demand for copper is due to increase, as decreased unemployment will result in more houses being constructed, for which copper is a key component. As copper is required for housing construction worldwide, such trends, observable by copper traders on copper futures charts, can result in a massive increase in the sellable price of copper and copper futures. The wide range of applications for the material also ensures that copper will generally always be in demand somewhere for some purpose. The supply of copper is also limited, so copper traders can expect to see rising prices as available supplies gradually diminish. With global demand likely to keep rising, copper trading could be very profitable in years to come.
Copper commodities are traded on several major commodity exchanges, such as the New York Mercantile Exchange (NYMEX), the Mumbai-based Multi Commodity Exchange, the Shanghai Futures Exchange (SHFE) and the London Metal Exchange (LME).
The main business market for copper is the construction market, as it is used in electrical wiring and plumbing due to its anti-corrosive and conductive properties. It also serves as the material used to produce coinage in some countries, and its anti-bacterial properties are harassed by practisers of alternative medicine, who fashion it into wrist bands and necklaces.
The United States and Russia are at the forefront of refined copper production, whereas Western Europe and the USA are the leading consumers. As the developing world continues to industrialise, though, it is likely that the global copper market will continue to expand, leading to greater demand for copper and therefore rising copper commodity prices.
Copper Commodity Prices
There are several factors that are observable as affecting the copper forecast, of which copper traders must be aware. Copper future prices are affected mainly by the global demand for housing and electrical appliances, which is a direct reflection of the state of the global economy. Spot prices can also be affected by the current supplies of copper available in a particular region. The shift in the public towards a desire for cleaner energy sources may also affect the price of the copper commodity, as copper is an important component in solar panels, which are believed to become more prevalent in the coming years. The same is also true of cars that run on electric batteries. Improving living conditions worldwide may become a significant market factor, as any expansion of commercial, industrial and residential infrastructure increases the demand for copper.