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COPPER: THE TRUE FIGHTER gives month on month account of the development in the copper market over the last decade. It highlights the changes in the copper price over each changing dynamics of supply and demand. Reading through the articles one can feel the movement in the copper market owing to the change geopolitical and economic changes in the fundamentals. The book gives you a virtual account of the various events and activity that has happened in the world of copper and global economy as copper is gauged as the barometer of the global economy. The Main factors affecting price determination of copper which are product cost, the utility and demand, extent of competition in the market, government and legal regulations, pricing objectives and marketing methods used have been explained in detail with real time examples.
Dr. Hanish Kumar Sinha is an Enthusiastic, Dedicated and Detailed oriented
Commodity Researcher who with his proven skills has strengthened the
operational and functional excellence of the Indian Commodity Sector. His
skills with over 20 years of experience in in the field of Commodity Research,
Risk Mitigation, Collateral Finance and Trade Facilitation well supported with
Sigma Six Black Belt and Business Analytics Certification has allowed him to
excel in achieving his professional goals aligned fully with those of the
commodities. The author is a PhD in Agricultural Economics from Banaras Hindu
University. Dr. Sinha has made notable contributions across print and
electronic media as “Commodity Expert” and has shared valuable insights with
regards to commodities market on Zee Business, NDTV Profit, ET NOW, CNBC AWAAZ,
Business Standard, Economic Times, Asian Age and other business channels and
print media. He has been a versatile speaker for various industry platforms.
https://www.amazon.in/dp/1636068081
FOREWORD
For thousands of years copper
remained important for making tools, weapons, jewellery and objects of art.
Presently, copper is used in building construction, power generation and
transmission, electronic product manufacturing, and the production of
industrial machinery and transportation vehicles. Copper wiring and plumbing
are integral to the appliances, heating and cooling systems, and
telecommunications links used every day in homes and businesses. Copper is an
essential component in the motors, wiring, radiators, connectors, brakes, and
bearings used in cars and trucks. Copper content in the average car ranges from
20 kilograms (44 pounds) in small cars to 45 kilograms (99 pounds) in luxury
and hybrid vehicles. But all these uses have limitation and are solely depended
on the supply and demand dynamics. The supply comes from the natural resources
which are notoriously difficult to monetise correctly as new deposits are
discovered, depletion is currently not understood, extraction technologies have
improved, new uses are found for resources and the occurrence of common pool
resource problems is prevalent. The market behaviour is depended on the mining
resources which is concentrated in Latin America and consumption demand of
which China accounts for 45 per cent of it. Political and economic changes in
both these countries tend to have significant implications for copper prices.
Labour unrest can disrupt supply and drive prices higher, while rapid economic
growth and infrastructure development can also drive demand, and subsequently
prices, higher.
Dynamism is
the key for copper market and different factor affecting the prices weigh
differently in different years which has been adequately explained in the book Copper: The True Fighter with various
degrees of application. In addition to classic issues of supply and demand and
economic growth the following specific issues are important drivers of copper
prices:
· Global
economic cycles: particularly in emerging economies: copper price and
demand typically reflect global economic cycles as it is broadly used across a
variety of economic sectors. It is closely tied to trends in developing
economies as it is heavily used in infrastructure development;
· Chile
and China: the two biggest players in supply and demand of copper,
producing or consuming over 30% of the global total. Political and economic
changes in both these countries tend to have significant implications for
copper prices. Labour unrest can disrupt supply and drive prices higher, while
rapid economic growth and infrastructure development can also drive demand, and
subsequently prices, higher;
· Declining
ore grades and other production issues: it is noted that at many existing
mines ore grades are declining, therefore more has to be mined to achieve the
same outputs. This increases a variety of associated costs in terms of labour,
energy, water and land use which are passed through in prices of refined
copper;
· Global
push towards energy efficiency and energy infrastructure upgrade: copper is
in high demand for its electrical transmission qualities, the large scale
changes to energy infrastructure and demand for efficient products is a
specific issue in copper demand;
· Expectations
and commodity markets: copper is a commodity that is very closely tracked
by markets, attracting significant trade and speculative activity, therefore
expectations of economic growth, investment, recession, disruption can all lead
to significant price impacts.
This book has
been a witness to one of the great revival of global economy from the Great
Depression, while events in Greece and elsewhere in Europe threatened the very
survival of the Euro Area. A disappointing recovery gave rise to concerns about
stagnation, the idea that deficient demand combined with stagnant productivity
growth doomed the advanced countries to chronic slow growth. In contrast,
emerging markets, led by but not limited to China, escaped the crisis largely
unscathed. They continued to expand throughout the crisis and for much of the
subsequent decade. As a result, the global economy grew at a more than
respectable average annual rate of 3.4 percent over the years from 2008 to
2018.
The phase of
globalization and growth survived the turbulence buffeting the world starting
in 2008 seemingly testified to the solid foundations on which the
twenty-first-century global economy rested. It all came apart in the final
years of the period. In its June 2016 referendum, the United Kingdom voted to
leave the European Union. In 2017 one of the first acts of the newly elected US
president, Donald Trump, was to withdraw from the Trans-Pacific Partnership.
The Trump administration declined to confirm the appointment of new members to
the WTO’s dispute settlement panel and in 2018 slapped tariffs on imports from
China, Europe, and even Canada, provoking tit-for-tat retaliation. The Chinese
economy showed signs of slowing, and emerging markets from Argentina to Turkey
experienced strains as the US Federal Reserve hiked interest rates. The
stability of the global economy, it appeared, hung in the balance. Another key
development over that period was the emergence of China as a leading power with
geopolitical ambitions.
Europe’s
Foreign and security policy leverage and economic-policy leverage go hand in
hand. The EU, for its part, has not shown the capacity to mount a common
foreign and security policy; different European countries have very different
views of what this would entail. The share of military spending in GDP is lower
in Europe than in both the US and China. This leaves China as the obvious
candidate to occupy the space vacated by the United States. As the leading
trade partner and source of foreign investment for a growing number of countries,
it already has some capacity to influence the shape of the international
economic order.
Apart from the
differing growth perspective in US, Europe and Asia, copper market witnessed
one of the most dreaded pandemic of its kind, “COVID 19 – Corona Virus” which
apart from taking millions of lives across the world, led the entire copper
dynamics off balance. The people at large are clueless about this mysterious
virus and are still learning to live with it. This book finally details about
how copper moves on strength to strength in the Covid times.
Dr. Hanish Kumar Sinha
Consultant – Agri-business, Research & Development
Mumbai - 2020
