After the surge in gold prices, another metal is heating up. Since March, global copper prices have continued to rise, with international copper prices breaking through the $9,000 per ton mark, attracting high attention in the capital market. This round of copper price surge has sparked widespread discussions and speculations within and outside the industry. What are the reasons behind this surge in copper prices? How will copper prices develop in the future?

Several Reasons for the Rise in Copper Prices

The main reasons for the rise in copper prices this time can be attributed to three major aspects: supply and demand, macroeconomic factors, and structural demand.

Firstly, supply and demand are important factors affecting copper prices. Recently, the reduction of high-quality copper mine resources and the difficulty in increasing smelting production have led to a weak copper supply. At the same time, the rise of electric vehicles and the arrival of the replacement cycle for electrical equipment have gradually increased the demand for copper. Institutional analysis indicates that the copper supply and demand expectations are shifting from surplus to shortage, which is also one of the important reasons for the current rise in copper prices.

Secondly, macroeconomic factors have also played a role in driving copper prices. As the world's largest consumer of copper, the Chinese government's support policies for metal-intensive industries and measures to promote large-scale equipment replacement, especially in the household appliances and electric vehicle sectors, will provide strong support for copper prices. On the other hand, the weakness in the U.S. labor market and the expectation of the end of the Fed's interest rate hike cycle will also put pressure on the U.S. dollar, thereby benefiting metal prices.

Lastly, structural demand is also one of the important factors driving the rise in copper prices. With the continuous development of decarbonization and artificial intelligence trends, people's confidence in copper prices remains strong. Computing power is the foundation of the development of the AI world, and the bottleneck of computing power ultimately lies in electricity. As the competition for AI arms race becomes increasingly intense, the competition for electricity becomes more and more important. Copper, as a key component of the energy transition ecosystem, is crucial for manufacturing electric vehicles, power grids, and wind turbines.

Optimistic Outlook for Future Copper Prices

The market generally holds an optimistic attitude towards the future trend of copper prices. Citigroup recently expressed a bullish view on copper in its report, pointing out multiple bullish factors. Firstly, the continuous recovery of the Chinese economy, coupled with the expectation of Fed's loose monetary policy, as well as the growth of structural demand and the supply risks in 2024, have become factors supporting copper prices. Overall, copper has resisted cyclical weakness since 2022, and the probability of price increase is increasing. Investors' expectations for a rebound in the global manufacturing industry bottom, as well as the net long positions held, also indicate that copper prices have more room for upward movement.

Seize the Opportunity of Rising Copper Prices with 4E

The opportunities brought about by the rise in copper prices should not be overlooked. Investors can participate in copper trading in various ways, including trading copper derivatives provided by the 4E exchange. The 4E exchange supports long and short trading with leverage of up to 50 times, with advantages such as small spreads, transparent quoting, licensed operation, safety, and compliance. The minimum investment threshold is less than $8, and it supports cryptocurrency deposits. The 4E platform not only supports trading in bulk commodities such as gold, silver, crude oil, and copper, but also supports a variety of financial assets such as cryptocurrencies, foreign exchange, stocks, and indices, providing investors with more convenient and flexible trading options.

The current rise in copper prices is supported by multiple factors, and the market holds an optimistic attitude towards the future performance of copper prices. Through suitable trading platforms, investors can seize the opportunities brought about by the rise in copper prices and maximize investment returns.

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