The signing of the world's largest trade agreement between 15 countries in the Asia-Pacific region and recent news regarding Moderna's vaccine lifted optimism on the market. One of the beneficiaries is copper, which started today's sessions with a massive bullish price gap - almost 3% or $ 200 per ton. However, this is not all for the copper market.
One of the key factors is the change in the attitude of the global car manufacturers towards the production of electric cars. It is expected that in the coming years, major concerns such as Toyota and Volkswagen will produce up to 5 million electric cars per month. This will generate a huge demand for copper due to the fact that this commodity is used to build electronic components.
The demand for copper will increase enormously in the coming years due to its use in the production of electric cars. Source: BloombergAnother aspect is also the increasing trade in the Chinese market. As of Thursday, the yuan-denominated contract will be available on the Shanghai commodity exchange, which will be available to foreign investors. It is a desire to compete with the London Stock Exchange as China would like to become a price-supplier, not just a price-taker, as it generates about 50% of the world's demand for this metal.
Copper launched today’s session with a massive bullish price gap. Recently, most of these price gaps have been filled, although sometimes it has taken a long time. Moreover, the very location of today's price gap should not come as a surprise either. These are the record levels recently observed at the turn of 2017-2018 and it seems that they will be difficult to break. Source: xStation5
