Copper Prices Skyrocket to $9,000, Breaking Long-Standing Range
According to Reuters, London Metal Exchange LME Copper prices have witnessed a notable surge of 3.1% on 13th March 2024. This is a notable rise in LME Copper prices as it breaks free from its year-long stagnation.
This upward momentum continued into 14th March, propelling prices to an eleven-month high of $8,976.50 per metric ton. The catalyst for this price surge stems from reports indicating that China's top copper smelters have agreed to reduce output after a meeting on 13th March.
The meeting comes as copper concentrate fees on the spot market dropped to their lowest in more than a decade, hurting smelters' profits. Reuters reported that the reduction in production of copper is in response to the shortage of raw materials in the market.
China's largest copper smelters convened in Beijing and agreed to implement a symbolic reduction in production, although specific volumes and timing were not disclosed.
Other measures, including using more copper blister in production to lower consumption of copper ore concentrate, were also discussed during the meeting.
The three-month benchmark copper on the London Metal Exchange (LME) (CMCU3) reached $8,799 per metric ton, marking its highest level since August 1, 2023. It last traded 1.6% higher at $8,790 as of 1055 GMT.
The upward movement originated on the Shanghai Futures Exchange (SHFE), where copper (SCFcv1) surged to a two-year peak of 70,460 yuan ($9,796) per ton.
Given China's status as the largest purchaser of concentrates globally, it finds itself particularly vulnerable to the resulting pressure on smelter profit margins.
Reuters emphasized the importance of considering upcoming new smelter projects outside of China, totaling approximately 1.7 million tons per year, which are expected to come online in the second half of the year and further strain global concentrate supply.
Satellite surveillance data of metal processing plants revealed that more global copper smelters were inactive in the first two months of this year compared to the same period last year, primarily due to reduced activity in China.
However, the surge in copper prices may suppress demand in China, the leading consumer, as evidenced by the increase in inventories monitored by SHFE warehouses, rising steeply to 239,245 tonnes as of March 8 from 30,905 tonnes at the beginning of the year.
Trading Copper Futures
Traders can trade Copper Futures Contracts from various exchanges through Orient Futures Singapore.
Some exchanges that traders can trade Copper futures includes Shanghai International Energy Exchange (INE Shanghai), COMEX (a division of the New York Mercantile Exchange NYMEX), and the London Metal Exchange (LME).
Here are the different Copper Futures that traders can trade under the different exchanges with Orient Futures Singapore.
Figure 1: A list of Copper Futures that traders can trade under the different exchanges with Orient Futures Singapore and the different copper futures symbols.
Each exchange offers its own specifications and trading rules for copper futures. This allows market participants to choose the platform that best suits their trading needs.
Traders can leverage the services provided by Orient Futures Singapore to access and participate in Copper Futures trading on various exchanges. By doing so, they can explore opportunities and capitalize on market movements in the copper futures market.
Refined Copper Arbitrage Trading
Traders also have the option to engage in refined copper arbitrage trading. This process involves capitalizing on price discrepancies between different markets to profit from buying and selling refined copper.
This strategy requires monitoring the prices of refined copper in various regions and identifying opportunities where copper can be purchased at a lower price in one market and sold at a higher price in another.
Through refined copper arbitrage trading, traders enhance market efficiency by contributing to liquidity, balancing regional price differences, and exploiting market inefficiencies.
Find out more about What is Arbitrage Trading and Rubber Cross-Arbitrage.
Future Copper Price Predictions
According to Trading Economics, Copper has seen a rise of 0.21 US dollars per pound or 5.42% since the commencement of 2024. Trading anticipates that copper will trade at 3.75 US dollars per pound by the end of this quarter, and 3.57 US dollars per pound in 12 months' time.
Start Trading With Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us.
We provide bespoke services to our professional clients, tailored to their corporate and individual needs. Our team will be there for you 24 hours on trading days to provide a one-stop portal for all your trades, with simple processes and an intuitive user interface that has low or near-to-zero latency.
