Can copper prices rise in March 2021?

There are too many variables in the operation of copper prices , and it is difficult to solve the problem of whether it can continue to rise, but at this stage, few people dare to be short and short copper prices.


At least, from the previous rise in the market, there is still a certain space above the copper price .


In the historical cycle of the past 20 years, the copper price has risen by more than 50% in 4 times, which were 2003-2006, 2007-2008, 2009-2011 and 2016-2018.


The current increase and rate of copper prices are lower than that after the financial crisis, which basically coincides with the initial trajectory of the 2003 increase, and is significantly stronger than the recent increase in 2016.


Looking back at the market and monetary policy environment at that time, the agency believes that the rise in 2016 and 2003 is not comparable to the current one, and the rise in 2009 is relatively more meaningful.


From the perspective of main factors, in 2009, the global monetary easing, the weak U.S. dollar, and the strong demand in traditional Chinese sectors pushed up the price of copper. Although this round has also released huge amounts of liquidity overseas, China’s attitude towards liquidity has always been biased. Be cautious, the traditional demand field is not as elastic as it was in 2009.


Therefore, this round of gains may be smaller than the 2009 round, but there is still considerable room for the top.


In addition, compared with the rise in 2016, most of the rebound in this round of major commodities started in March 2020, which is strongly related to the development trend of the epidemic. Coupled with the driving force from the global economic stabilization and demand rebound, its rise is expected to exceed the 2016 market.


According to the understanding of the 21st Century Capital Institute, the core logic that triggered the current round of rising prices of internationally priced commodities such as copper and the release of intensive economic policies in various countries still lies in the development and control of the epidemic worldwide.


Comparing the trend of new cases of foreign epidemics, we can see that the inflection point of overseas epidemics is expected to be 6-9 months behind domestic ones. In the first half of 2020, after the domestic epidemic was effectively controlled, due to the suspension of overseas work, some orders were transferred to the domestic market, superimposing the restocking demand brought about by the resumption of work later than previous years. The domestic self-priced bulk commodities rebounded significantly in the second half of the year. The rise of black products.


In January 2021, the inflection point of the overseas epidemic appeared, and the number of new cases continued to decline in February, and the inflection point was further verified. As a result, the overseas market began to experience the trend of the domestic market since April 2020, the manufacturing industry began to recover.


The improvement on the demand side combined with the support of overseas excess liquidity has stimulated the accelerated rebound of the prices of internationally priced raw materials such as copper and crude oil, and has become the leading product in the commodity market.


Considering that the global economy is still in the process of slow recovery, and the continuity of economic stimulus policies in various countries is better, they will all support copper from the demand side, and it is difficult to reverse the upward trend of copper prices in the short term .


The uncertainty comes from the currency side.