COPPER: THE TRUE FIGHTER

COPPER: THE TRUE FIGHTER  

Copper: The True Fighter

 

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