In world metal usage, MCX Copper ranks third. It comes after steel and aluminium. MCX Copper is the best non-precious metal conductor of electricity. It has good strength, ductility, and resistance to creeping and corrosion. It makes it the preferred and safest conductor of electrical wiring in buildings. Economic, technological, and societal factors influence the supply and demand of MCX Copper.
Land-based resources contributes to 1.6 billion tonnes of MCX Copper. Deep-see resources contributes to 0.7 billion tonnes of MCX Copper. Worldwide, approximately one-third of all Copper consumed is recycled copper. More than 25 countries produce Copper today. The risk of disruption in global supplies is low because of global dispersion of Copper production. On the other hand, because of its importance in construction and power transmission, any stoppage in supplies will have a major effect on the economy.
Producers, exporters, marketers, processors, and SMEs with exposure to Copper can manage their price risks by hedging. When uncertainty looms large, modern risk management techniques and strategies, including market-based risk management financial instruments like ‘MCX Copper Futures’, offered on the MCX India platform. It can improve efficiency and consolidate competitiveness through price risk management. The importance of risk management thus cannot be skipped while trading Copper in Commodity Market.
Factors Influencing the price of MCX Copper
► Copper prices reflect prevailing international spot market and the USD–INR exchange rates.
► Commodity-specific events, such as – The construction of new production facilities or processes. New uses or the discontinuance of historical uses. Unexpected mine or plant closures (natural disaster, supply disruption, accident, strike, and so forth), or industry restructuring.— all affect the price of the metal.
► Trade policies set by the government (implementation or suspension of taxes, penalties and quotas) affect supplies as they regulate (restricting or encouraging) material flow.