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A beginner’s guide to copper: Price, uses & market overview
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On this page, we explore everything you need to know about copper. Gain insights into copper market trends, pricing mechanisms, and the environmental impact of copper.
Read on to learn more about this popular commodity and find links to beginner-friendly guides explaining how you can get involved in copper.
What is copper?
Copy link to sectionCoppy is a vital commodity in today’s world and one of the earliest metals ever discovered.
Its unique properties have ensured its continued relevance over thousands of years. Copper is an excellent conductor of heat and electricity, making it an essential material in electrical wiring, power grids, and heat sinks for electronic devices.
Copper’s impressive malleability and ductility means it can easily be shaped into various forms which has resulted in it being widely used for pipes, tubes, and sheets used in construction and plumbing. The rise of renewable energy and EVs, both of which are heavily reliant on copper is expected to further propel demand for the versatile metal.
Copper market overview
Copy link to sectionCopper is an easily accessible commodity that trades on a few exchanges including the London Metal Exchange (LME) and the Commodity Exchange (COMEX). There are several options available for trading or investing in copper including CFDs, futures, options, and spot. The most common way for retail traders to access copper is through CFDs.
For a more indirect approach, the best copper stocks and Exchange Traded Funds (ETFs) offer an alternative. The price of copper has exhibited historical volatility and is influenced by a range of factors like global economic growth, infrastructure development, and supply chain disruptions.
The early 2000s is when copper started to get going, with prices increasing approximately 600% over the past two decades. Many experts envisage new highs in the coming years. With a compound annual growth rate (CAGR) of 8.2%, copper is expected to steadily grow until 2030.
Is copper valuable?
Copy link to sectionYes, copper is a valuable commodity and there are numerous reasons why investors are attracted to the market. We have highlighted some of these key fundamentals below, explaining what they are and why they matter.
- Hedge against inflation. The risk of inflation concerns all investors. Inflation occurs when a currency loses value over the years, and as this occurs, the prices of essential commodities rise and prove lucrative for commodity investors. As such, investing in copper provides a hedge against the rise in inflation.
- Diversify your portfolio. Investing in a commodity like copper is a means of diversifying your portfolio. Diversification of assets in your investment portfolio hedges against specific asset risk. As copper is a versatile metal that is globally popular, adding copper to your portfolio hedges against the risk of other underperforming assets.
- Electricity demand. Electricity is conducted through wiring, and copper is used to make electrical wiring. Electricity is necessary for the generation and transmission of power which is the cornerstone of modern technology. Investing in copper aids the speculation of rising demand for electricity.
How to invest in copper
Copy link to sectionYou can invest in copper by using a commodity trading platform. These platforms offer a range of commodities and are very easy to use. There are different platforms suitable for specific requirements. For a more targeted approach, you can use the best copper trading brokers.
Some let you buy physical copper, others let you trade copper, and many are designed for investing in the metal. Visit our dedicated guide to discover how to invest in copper.
Copper in your investment portfolio
Copy link to sectionA diverse investment portfolio can help protect you during market uncertainty, and the inclusion of copper can add value while allowing you to spread your money across various markets.
Copper often moves independently to traditional investments like stocks and bonds. You can include copper in your portfolio as a hedge against potential losses. During times of economic uncertainty, investors view commodity grains such as copper as attractive options.
Copper’s long history and the fact it is a crucial commodity in various growing industries, make it a good long term play.
Copper vs other commodities
Copy link to sectionCopper is part of the metals family of commodities, including gold, platinum, and palladium. Each commodity is unique in its own way and offers different features for investors and traders. You can learn more about specific precious metals using our dedicated guides below.
