Borrowed from the local "Dongfeng" copper price rebounded

Recently, the international market has been turbulent. The effects of the earthquake and tsunami in Japan have not yet ended. Multinational coalition air strikes against Libya have added great uncertainty to the market trend. Affected by this, the recent copper price has a narrow range of oscillation, I believe that from the trend point of view, copper prices have gradually stabilized, is expected to be affected by geopolitics and the expected impact of post-disaster reconstruction, Shanghai copper is expected to usher in a continuous rally.

Geopolitical factors may support the rebound of copper prices. Recently, a multinational coalition raid on Libya is undoubtedly the biggest hot spot in the market. Although Libya is not a big country in the production and sales of metal copper, as a very important basic metal, geopolitical factors will inevitably have a greater impact on copper prices. The war will have a certain amount of support for the commodities of resources, and the demand for basic metals after the disaster will increase accordingly.

On the outbreak of the Iraq war on March 20, 2003, we discovered that both are OPEC oil-producing countries. The Iraq war has certain similarities with the Libya war. Recalling the trend of copper prices at that time, we discovered that the copper price showed a bottoming rebound trend after the outbreak of the Iraq war. In the year after the outbreak of the war, the price of copper rose in an oscillation trend, rising from around 1600 US dollars to around 3,000 U.S. dollars. It was 1400 US dollars, an increase of 88%. Although we cannot judge whether the increase in copper prices at that time was due to the Iraq war, at least we can judge that the Iraq war did not result in a sharp drop in the price of copper. The war at that time had a decisive factor in copper prices.

The multinational coalition air strike against Libya also has a major impact on commodities. As the largest oil-producing country in North Africa, the impact of the Libya war on crude oil prices is the first and foremost, followed by base metals. Judging from the recent trend of copper prices, before the outbreak of the Libyan War, copper prices fell at a high level to sort out the trend, and the disk has gradually stabilized in recent days. The author believes that similar to the trend of copper prices after the outbreak of the Iraq war, it is expected that copper prices will adjust. It is nearing the end and there is hope for a continuous rally. Since the current price of copper has increased by a large margin compared with 2003, it is not realistic to measure according to the increase rate at that time. However, if we look at the rising height, from the recent low copper price of 8944, Lun Copper may reach US$10,344. , Shanghai copper is expected to reach around 77,000, copper prices will once again test the pressure of historical highs.

Japan's post-disaster reconstruction supports copper prices Although Japan's nuclear power plant problem has not been completely resolved, investors’ confidence has gradually recovered. The Nikkei index has continued to rebound after it stabilized, and the current rebound from the low point has reached 17%. The author believes that the hot spots of the market will quickly turn to Japan's post-earthquake reconstruction work, and post-disaster reconstruction will inevitably increase the demand for basic metals. At least we can see that Japan’s post-disaster reconstruction will have certain support for copper. Limit the fall of copper prices.

After the outbreak of the earthquake in Japan, the Bank of Japan's cumulative investment in the market has reached 42 trillion yen (about 520 billion US dollars), the World Bank predicted that the Japanese earthquake and tsunami caused losses between 123 billion to 235 billion US dollars. The author believes that a large amount of capital injections by the Bank of Japan will have certain advantages in restoring market confidence. However, after market confidence recovers, excess liquidity will undoubtedly increase inflationary pressures, or it will push up commodity prices again.

In summary, the impact of Japan’s earthquake and tsunami has gradually eased, and post-disaster reconstruction work is expected to be the focus of the next phase. The large amount of capital injections by the Bank of Japan will increase the pressure of late inflation, and the Libya war will have a certain amount of support for copper prices. It is expected that the short-term adjustment of copper prices is nearing its end and copper prices are expected to rebound.