Friday May 20, 2022

It is one of the suitable alternative investments

The most important of the family of industrial metals is unrivaled. Since two years of history, this metal has been an integral part of the consumption of civilization and was the first metal that was and processed by hunters. Between 2004 and 2006, there was a sharp rise in prices and it reached more than 300% in less than two years.

Due to the abundance and availability of copper, it was used in the manufacture of weapons, supplies and art objects.

Later, bronze began to be produced from copper and copper, which gave rise to new stages of human civilization. It was about the same time that Brno started to be a commodity with a commercial value.

Today, reddish metal plays an irreplaceable role in a large number of manufacturing industries. It is used in the production of crushed stone in electronics, in telecommunications, in transformers, in the production of electromagnets, but mainly and especially in construction. In the USA, 50% of copper is consumed first in this sector, and it is similar in other countries. It is therefore clear that the price of copper will deviate from the development of the real estate market to a certain extent.

But first of all, you need to realize that it is a mineral and daily its world is declining, it becomes more and more, and like oil, it is so necessary for the operation of the industry that it is difficult to find an adequate substitute.

Among the countries with the most, copper is unrivaled Chile, which is the world leader in these raw materials. Among the big games played are the US, NA, Indonesia and Zambia. In the Central European region, the main title and processor of copper is Poland and especially the Polish company KGHM. The world’s largest copper processors are BHP Billiton, Rio Tinto Group and the American Phelps Dodge.

For investing in copper?
If you are a producer or consumer of copper, investing in this metal should be a matter of course. Between 2004 and 2006, there was a sharp rise in prices and it reached more than 300% in less than two years. Especially consumers could literally “pay extra” for the rise in copper prices, if they did not secure themselves during their patina business, and by buying options or other derivatives.

Investing in industrial metals may not be of interest only to market participants, but it has become more and more likely to appear on stock exchanges by large fund managers and, of course, by speculators. I will try to outline the main reasons for which it has become the subject of these subjects.

They are breeding similarly to gold in the capital markets, especially their reaction to the fundamentals coming from the US money market, which is considered to be the most important worldwide.

M is in correlation with the exchange rate of the dollar, which means that if the price of the dollar in foreign exchange markets falls or if its global purchasing power decreases, mm tends to maintain its value or increase. We could witness this in the last two months. The first of these reasons investors invest gold, he put metals in their portfolios. This will cover losses caused by both the fall of the dollar and rising inflation. Metal prices tend to rise along with the prices of economic duties.

The reason for including copper in the portfolio is the common sense of the investor. Copper has been, is and will be needed and will not increase in the world and most likely will not increase. This in itself should quite logically result in a continuous rise in the price of this metal.

To some extent, this statement is true, but you need to take into account alternative options, ie that there may be a cheap and more abundant substitute, or if there are new spreads or that demand simply will not accept a high price and it will then be under commercial and political pressure will dream. The probability that these possibilities will be fulfilled is, according to my opinion, low, at least within a few years.

The last important factor is the megalomaniacal boom of developing countries and their construction of infrastructure, which cannot effectively cover the requirements of business and life, even in these countries, and the associated increased consumption of all available goods.

Two years ago, for example, there were only 40 million cars per billion inhabitants and more than 9 million new cars were sold. The course of the construction of houses, factories and other premises and we must not forget the 2008 Summer Olympics, around which the massive construction of anything you can think of will also take place. And as I mentioned two, the consumption of copper and other industrial metals is associated with construction, telecommunications and electronics.


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