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Copper commodity



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Copper commodity

  1. 1. P R E S E N T E D B Y : T E J K U M A R Copper
  2. 2. Introduction Copper (chemical symbol - Cu) is a malleable and ductile metallic element that is an excellent conductor of heat and electricity. It stands at the third place after steel and aluminum, in the context of consumption. Copper is an important contributor to the national economies of mature, newly developed and developing countries. Copper is one of the most recycled of all metals. It is our ability to recycle metals over and over again that makes them a material of choice.
  3. 3. Indian Scenario In 2012, India's production of refined copper is 689,312 MT India produces around 4% of the total world production. Sterlite Industries, Hindalco, and Hindustan Copper are three major producers of copper in India India is emerging as a net exporter of copper on account of a rise in the production of copper. Electric and electronic products industry has become India's largest copper consuming sector.
  4. 4. Global Scenario Growth in refined copper usage has been especially strong in Asia demand has expanded more than five-fold in less than 30 years. Major refined copper exporting countries are Chile, Zambia, Japan, Russia and Peru, while major refined copper importing countries are China, USA, Germany, Italy and Taiwan.
  5. 5. Demand supply scenario 1300 2300 3300 4300 5300 6300 7300 8300 9300 -0.9023 -0.7023 -0.5023 -0.3023 -0.1023 0.0977 0.2977 0.4977 0.6977 0.8977 $/MT INMTMILLIONS Surplus/Deficit (LHS) LME Copper 3-M Last Price (RHS)
  6. 6. Demand and Supply In 2011, world’s copper mine production continued to underperform with respect to capacity, and remained at the 2010 level of 16.005 million metric tones (MMT). In 2011, the global refined copper production was 19.630 MMT, up from 18.998 MMT in 2010. The global refined copper consumption was 19.988 MMT, compared with 19.375 MMT in the previous year. On a regional basis, refined copper production increased in Africa (11%), Asia (6%), Europe (4.5%) and Oceania (12.5) but decreased in the Americas (-3.5%).
  7. 7. Factors Influencing the Market Economic events such as the national industrial growth, global financial crisis, recession and inflation affect metal prices. natural disaster, supply disruption, accident, strike, and so forth, or industry restructuring, all affect metal prices. Geopolitical events involving governments or economic paradigms and armed conflict can cause major changes Commodity-specific events such as the construction of new production facilities or processes, new uses or the discontinuance of historical uses also affects prices.
  8. 8. Exchanges traded
  9. 9. Contract specification Symbol COPPER description COPPERMMYY Trading unit 1MT Quotation/ base value 1MT Maximum order size 70MT Tick size 5 paisa/kg daily price limit 4% Initial margin 5% Delivery unit 9MT with tolerance limit of +/- 1%(90 kg) Delivery margin 25% Delivery centre Within 20km outside Mumbai octroi limit Delivery logic Both option
  10. 10. Price movements
  11. 11. Hedging in copper  Scenario 1:If price falls
  12. 12. Scenario 2:If copper price rises
  13. 13. Conclusion