Copper: Price Chart, Overview and How to Invest
Considered a tertiary commodity compared to the shinier appeal of silver and gold, copper is often the third choice for metal-focused traders and investors during economic uncertainties. Today, this metal is also the third most used metal globally as it plays a key role in the world’s major economies.
With that in mind, we've packed today's guide with some of the most interesting must-know copper statistics, prices and forecast. We’ll also show you how to trade copper in a few steps.
What is Copper? Definition and Overview
Copper's most unique characteristic is its reddish-orange shade. Despite being regarded as a base metal, this commodity, with the symbol Cu on the period table, is found under the same group as precious metals like gold, silver, and platinum.
We can trace copper history back thousands of years. Mesopotamians from the Bronze Age were probably the first society to familiarize themselves with the commodity, as these early civilizations would use it as a bartering tool. They would usually measure its value against livestock and food.
That said, while the metal has also been used since Roman times for coins, together with silver and gold, it always had a low inherent value, thanks to its abundance. This implies that, unlike gold and silver, copper has never really carried the status of a monetary standard.
Fast forward to the 21st century, and copper is used in a wide array of industrial processes, with its heat conductivity, flexibility, and strong electrical conductivity making it extremely useful in a diverse range of sectors.
Copper Price History and Price Today
Let's take a look at the price of copper over the years. Price analysis enables investors to identify the intrinsic worth of a security before investing their hard-earned cash in it.
Copper Historical Price
Copper has been traded for centuries. In the 18th century, the metal's demand soared in Europe as Britain's Royal Navy chose to use it to sheath the bottom of their entire ships. This pushed up copper historical prices to what remains the record high of over $23,000 per ton.
The upsurge in demand also encouraged the creation of mining operations abroad, mainly in Chile. This rise in production pushed the price back down by the beginning of the 19th century. It did not start trending higher again until the 1960s, though a combination of the broader commodities boom, the oil crisis, the Vietnam War, and economic growth in Japan. Price fell again during the 1980s recession but recovered as we approached the end of the decade.
In the 1990s, copper's price skyrocketed again, as demand from China grew. By 2002, China had overtaken the United States to become the world's largest copper consumer. The Comex copper price grew by 480% from $0.66 to $3.8 per pound between 2002 and 2008.
The 2008 global financial crisis caused the copper price to fall by 67% in less than 8 months. Thereafter, the price rose, hitting a new all-time high of $4.60 per pound in 2011.
What Influences the Price of Copper Today?
It is essential to understand what can influence the prices of copper, as it helps you best prepare and anticipate your trades. Some of the most significant drivers of prices are:
- Metal substitution
- The U.S. housing market
- Supply disruptions
- Emerging markets
- Global economic growth
- Oil prices
- Strength of the U.S. dollar
- Copper production costs
- Political unrests in major mining countries
Copper Price Chart
As seen on the copper price chart below, the price of copper is historically linked to the health of the global economy. Experts attribute this to the fact that this commodity isn't easily replaceable. Indeed, industries that use it cannot substitute it as quickly as with most other base metals.
Case in point, in 2011, the commodity set its previous record price. As noted earlier, this was around the peak of the commodities super cycle, which was sparked by China's rise to economic heavyweight status (fueled by vast amounts of raw materials.)
In 2021, the price of Copper was up more than 400 percent when compared to 2000s price. Even though this big increase does not account for inflation, it still is a sizeable gain.
Why Invest in Copper Today? Points to consider
There are many reasons why traders choose to invest in copper. Here are just some of them.
- The many Copper uses
Archaeological evidence suggests that the metal was, without a doubt, the first metal used by mankind over 10,000 years ago. Copper today is just as essential and is the best non-precious metal conductor for electricity. It is mainly used in transformers, motors, generators, and power cables, electrical components and electronics.
In buildings and homes, the metal boasts practical as well as decorative uses in wiring and pipes. We can find other uses in the realm of renewable energy and electric vehicles. A battery-electric car, for instance, uses up to 83kg of Copper.
- The copper market is highly liquid
With high investment and demand, Copper is one of the most actively traded commodities globally, which implies it can be acquired and sold with comparative ease, when traders look to exit or enter a position.
- Portfolio diversification
Commodities like this one allow investors to diversify their portfolios away from bonds and stocks. Investing in copper also acts as a hedge against low-interest rates and inflation.
- Clean energy transition
The US climate summit held on in April 2021 saw countries commit to a net-zero emission target, and the US re-signing the Paris Agreement treaty on climate change. Better yet, China's president also reiterated the country's 2060 carbon neutrality target and pledged to cut coal consumption from 2026.
What does all this have to do with Copper's future? Well, it is a key component in renewable infrastructure and electric transportations.
Where Can I Trade Copper?
Interested in the metal's promising future? All you need to do is find a reliable brokerage platform to start trading. ZFX is one of these and is suitable for traders of all skill-levels.
The ZFX platform gives access to many different financial assets, including commodities, currencies, indices or stocks, which can be traded with leverage. Note that it is a high regulated broker, and that is provides the popular MT4 platform
How to Start Investing in Copper Now
To register an account with ZFX, all you'll need to do is follow this step-by-step guide.
Step 1: Register with ZFX
To start copper trading, visit the ZFX website and find the "Open an Account” link. If you'd rather prepare before investing your real money, open a demo account and apply your trade strategies risk-free.
Pick the "try demo" option next to the "Open an Account" option for a demo account.
On the next page, ZFX will require you to submit some of your personal information. You'll need to provide your gender, given name, family name, phone number, and a strong password. After filling out all the fields, proceed to the next step as shown below.
Step 2: Make Your First Deposit
Once your ZFX account is confirmed and opened, you can begin trading. Transfer your preferred amount of money to your new broker account, and let's roll. You're now ready to become an investor.
Step 3: Account Verification
Before you can withdraw your profits from ZFX, the broker is obligated by law to ask you to scan and upload your proof of identity. This can be an I.D. card, passport, or bank statement. ZFX will take approximately 24 hours to review and approve your identity.
Step 4: Trade Copper
With ZFX, you will trade all your assets on MetaTrader 4 (MT4). To start using it, install the platform using the link on top of the page.
Then, log in using the details ZFX sent to your email, and start trading copper. ZFX will also send you every relevant copper price news to ensure you always make educated decisions.
Things to Know Before Trading Copper
Here are a few things that can help you start trading copper in the best conditions.
Always stay on top of the news
As a copper investor, ensure you follow all copper-related news as well as trends in the electronic, automotive, and construction industries. Monitor the state of supply (particularly from South America) and try finding any indications of the level of copper demand.
Ways to Invest in Copper
For anyone looking to enter the copper market, there are a number of options you can take advantage of, including copper ETFs, copper futures, physical Copper, CFDs. Note, though, that when you trade Copper using CFDs, you’re using a leveraged product – therefore, losses and profits will be magnified.
Labor disputes and government policies
As an essential gauge of the global economy, the copper price today can be significantly affected by government policies like economic stimulus programs and taxation rates on mining output. Also, political instabilities in countries like the Democratic Republic of Congo (a significant copper producer) have been known to impact the price of Copper.
Beware of a resurgence in Covid-19 infections, particularly in China, as that could have a major impact on industrial activity, which could, in turn, weigh on prices.
Copper Forecast, Future, and Prediction
This section will study copper price forecast, using different types of analysis.
Technical and Fundamental Analysis
- If the price of Copper breaks above $4.40, it will invalidate the current bearish view and perhaps resume the medium-term bullish run toward the previous high of $4.60.
- If the price breaks above $4.60, that should open the door for a rally toward the 2.272 Fibonacci extensions at $5.20.
Analysts and Financial Forecasts
In the short term, we can still expect volatility in prices. This is due to uncertainties created by US foreign and economic policies, including the trade war with China and the prolonged impact of the covid-19 pandemic on the global economy.
That said, analysts are still quite optimistic about the longer term. For instance, Goldman Sachs expressed confidence in a recent research note, saying that the asset's long-term fundamentals remain strong.
The firm went on to note that the copper concentrate market is currently headed for a 430,000-ton refined deficit by the end of 2021, followed by a 200,000-ton deficit in 2022. As for Copper's price prediction, the firm forecasted $5.21 per pound by mid-2022.
Bottom Line: Is Copper a Good Investment Now?
As we've seen, this metal is crucial to the global economy. As such, demand for it should grow over the next couple of years as the global economy recovers and expands. Moreover, copper price forecast look optimistic. This suggests that this metal could indeed be a good investment now.
Ready to invest? If so, you can get started right now by signing up to ZFX. This regulated broker will allow you to trade copper and many other promising instruments in just a few simple steps.