What affects the price of copper?
Considering the wide use of copper in the economy and the large number of countries involved in trading it, it might look hard to determine the factors that have a major impact on the price of copper. To help traders understand what moves the copper markets, below we break down these factors in four main categories.
- Demand from emerging countries
Emerging markets with fast developing economies are among the key drivers of copper prices. The growth that China, India and Brazil have seen in the recent decades increased the demand for copper significantly. A key indicator for copper traders to keep an eye on is performance of such countries and their ability to keep up their growth rate.
- Supply uncertainty
It is worth noting that when it comes to copper, political instability can have a direct effect on the price. Let’s take South America for example, a key region in mining copper. Back in 2007, Bolivia’s President nationalized the country’s mining industry causing a disruption in the supply and pushing the price higher.
- The housing market in the US
Since copper is used widely in home building, the magnitude of the US horsing market, makes it a key economy to keep track of. Reposts such as the US GDP (Gross Domestic Product) and Non-Farm Payrolls are key to traders looking for clues about the price of copper.