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What Moves Copper Futures Price?

copper price study

Copper is the first metal that was discovered, mined, and crafted by man.  While copper was initially a primary source of income for traders throughout the Western and Eastern world, it has became a commodity used in a different type of trading today. 

Used mainly for household goods and electronics, copper remains a very important metal in the manufacturing industry.  Investors who prefer to trade copper futures should research copper futures price and what drives these prices in copper futures trading. 

Once you have an understanding of the causes of prices spikes and falls, you can make an informed investment and build a quality investment portfolio.

Daily Copper Prices (COMEX)

Major Copper Supplying Countries

During the 1900s, copper was discovered in different areas throughout the world.  With no mining regulations at that time, individuals and companies could search for copper however they desired.  Now, with copper supply shortages, mining regulations restrict who can mine and where they can mine. 

Copper is mined and extracted from Chile, Utah, New Mexico, Indonesia, and Peru. 

A British Geological Study named Chile the top copper producing country in the world, holding at least one-third of the world’s share in the metal.  The United States follows closely at second place after Chile.  With the copper usage at an all-time high, the supply of copper is barely sufficient to meet the demand today. 

Copper futures price is based on supply and demand.  When supply goes up, the price of copper will decrease.  When demand outweighs supply, the price of copper will rise.

copper point and figure chart

Why is the Demand for Copper So High

Copper is used for a number of different applications throughout the world.  The construction industry as well as the electronics industry are big players in using copper metals and alloys.  More than 60 percent of the world’s supply of copper is used in electrical wiring.  Another 20 percent is used in roofing and plumbing with industry machinery following closely at 15 percent. 

Copper can also be combined with brass and bronze to create a harder alloy that is used for machinery.  With 95 percent of copper used in the construction and electrical industries, the remaining 5 percent is used for various other applications.  Giant manufacturing corporations using copper for production play a huge role in the fluctuation copper futures price. 

When more companies need more copper, the copper futures price will increase correspondingly.

Intervening Forces That Affect Copper Futures Price

A number of different intervening forces affect the copper futures price.  The overall world economy, the invention of new products, large building projects, natural disasters, and the availability of copper will drive the copper futures price up or down.

Copper Futures Price Historical Highs and Lows

Between the period from 1988 to 2011, the price of copper futures averaged at $147.40 dollars.  The historical high of copper futures prices is at $457.95 in February of 2011 with a record low in November of 2001 at $60.40.  The reason for the all-time low was sparked by the September 11th terrorist attack.  The all-time high was triggered by a significant shortage that could not meet the global need.

Copper futures price will fluctuate over time depending on current events and new inventions.

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