What factors do copper prices determine?

The factors affecting copper prices include supply, demand, pressure on commodity markets and current stocks that have already been introduced. Given these variables and the fact that many of them act independently of others, copper of volatility often experiences something that many expect to continue in the long term. Although these factors lead to a wide range of copper prices over time, there are influences that also affect each of these areas and contribute to the overall price to a lesser extent.

One of the largest factors affecting the price of copper is demand. Copper is a material used in a large number of applications, including new design and reconstruction. If the economies are growing, then there is a growing demand for new construction and more copper. For example, building is approximately half of all copper use, with engineering ideas by almost 25 percent and electric applications are approximately 17 percent. Growth in Asian economies, in particular, which represent 50 percent of all copper use is anotherAn important factor.

Another factor influencing copper prices is the offer. While the offer may increase or reduce over time, the trend tends to show an overall reduction in the mined amount of copper. Copper production comes mainly from America, Europe and Asia, which combines for more than 90 percent of copper produced in the world. As less copper produces, the more rare commodity is, and therefore higher copper prices tend to be. The attack on this effect is copper mining, finding new copper stores or finding other price contesting materials that can replace copper.

Increasing various hedge funds that have or at least partial focus on commodities also affect copper prices. The managers of these funds look at the data and try to determine the supply of data. Although it apparently has a correlation in the real world, such funds can increase the volatility of copper prices, especially in the short -seasonBém horizon. In the past, prices tend to change gradually, but there are more spikes on the current market, low.

To help balance some of these pressure on copper prices, stocks can be used with regularity. In fact, copper reserves reached their lowest level in six years in 2010, which this year led to higher prices. As long as demand continues in advance of production, then copper prices are likely to remain high. However, the use of existing copper stocks is only a short -term price pressure solution.