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INTRODUCTION
APPLICATIONS
DEMAND AND SUPPLY
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Copper (chemical symbol - Cu) is a malleable and ductile metallic element that is an excellent conductor of heat and electricity. It is also corrosion resistant and antimicrobial.It stands at the third place after steel and aluminium, in the context of consumption.Copper is an important contributor to the national economies of mature, newly developed and developing countries.
Copper is one of the most recycled of all metals. It is our ability to recycle metals over and over again that makes them a material of choice.
The global demand for copper continues to grow. The world’s refined copper usage has surged by around 300% in the last 50 years, owing to expanding sectors such as electrical and electronic products, building construction, industrial machinery and equipment, transportation equipment, and consumer and general products. Copper's chemical, physical and aesthetic properties make it a material of choice in high technology applications. Since copper is bio-static, that is bacteria does not grow on its surface, it is also used in air conditioning systems, and as an anti-germ surface in hospitals.
In 2011, world’s copper mine production continued to underperform with respect to capacity, and remained at the 2010 level of 16.005 million metric tonnes (MMT).
= In 2011, the global refined copper production was 19.630 MMT, up from 18.998 MMT in 2010. The global refined copper consumption was 19.988 MMT, compared with 19.375 MMT in the previous year.
= On a regional basis, refined copper production increased in Africa (11%), Asia (6%), Europe (4.5%) and Oceania (12.5) but decreased in the Americas (-3.5%)
COPPERCOPPER
Source : Brook Hunt — A Wood Mackenzie Company
World Refined Copper Production World Refined Copper Consumption
Source: ICSG, CRU
The Multi Commodity Exchange of India Limited (MCX) is a state-of-the-art, demutualised, electronic commodity futures exchange that facilitates online trading, and clearing and settlement of commodity futures transactions, providing a platform for risk management. MCX offers trading in more than 40 commodity futures contracts across segments including bullion, ferrous and non-ferrous metals, energy, agricultural and agri-based commodities.
(in thousand MT)(in thousand MT)
55%
19%
11%
7%3%
5%
Wire Rod
Alloys
Tube
Plate, Sheet & Strip
Rods, Bars & Sections
Others
34%
31%
13%
13%
9%
Electrical & Electronic
Construction
Transport
Machinery
Consumer Products
Global Copper Consumption by first-use Global Copper Consumption by end-use
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
2008 2009 2010 2011 2012*
Oceania
Europe
Asia
America
Africa
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
2008 2009 2010 2011 2012*
Oceania
Europe
Asia
America
Africa
MCX is a leading
commodity exchange in India, with a
market share of 87%*
(Q3 FY 2012-13)*In terms of the value of commodity
futures contracts traded (Source: Data maintained by FMC)
For private circulation only
INDIAN SCENARIO
GLOBAL SCENARIO
FACTORS INFLUENCING THE MARKET
IMPORTANT GLOBAL EXCHANGES
= In 2012, India's production of refined copper is 689,312 MT, which is around 4% of the total world production.
= Sterlite Industries, Hindalco, and Hindustan Copper are three major producers of copper in India. From the status of a net importer, India is emerging as a net exporter of copper on account of a rise in the production of copper.
= Electric and electronic products industry has become India's largest copper consuming sector, accounting for 36% of the total Indian copper consumption. Telecom is still India's second largest copper consuming sector, accounting for 20% of the total Indian copper consumption
= Growth in refined copper usage has been especially strong in Asia, where demand has expanded more than five-fold in less than 30 years.
= Major refined copper exporting countries are Chile, Zambia, Japan, Russia and Peru, while major refined copper importing countries are China, USA, Germany, Italy and Taiwan.
= Copper prices in India are fixed on the basis of the rates that rule in the international spot market, and
Indian Rupee and US Dollar exchange rates.
= Economic events such as the national industrial growth, global financial crisis, recession and inflation affect metal prices.
= Commodity-specific events such as the construction of new production facilities or processes, new uses or the discontinuance of historical uses, unexpected mine or plant closures (natural disaster, supply disruption, accident, strike, and so forth), or industry restructuring, all affect metal prices.
= Trade policies set by the Government (implementation or suspension of taxes, penalties, and quotas) affect supply as they regulate (restricting or encouraging) material flow.
= Geopolitical events involving governments or economic paradigms and armed conflict can cause major changes.
= As societies develop, their demand for metal increases based on their current economic position, which could also be referred as ‘National Economic Growth Factor’.
Exchange Product Lot Size IST
LME Grade A Cathodes 25 MT 6:30 to 00:30*17:10 to 22:40**
Shanghai Futures Standard Copper 5 MT 06:30 to 9:00 Exchange (SHFE) Cathode 11:30 to 13:30
COMEX Grade 1 Electrolytic 25,000 pound 18:00 to 17.15*** Copper
# MCX Grade 1 Electrolytic 1 MT 10:00 to 23:30 (Monday- Friday)Copper 10:00 to 14:00 (Saturday)
www.mcxindia.com* LME select ** LME Ring timing (Start time:- Ring session, End time - Kerb Trading) *** ET: NY Time - electronic trading, #: Day light timing 10:00 to 23:55 (Winter)
Leading Exporters - 2011Refined Copper Leading Importers - 2011Refined Copper
Source: ICSG
Globally, MCX is No.1 in gold
and silver, No.2 in
natural gas, and No.3 in crude oil*
*In terms of the commodity futures contracts traded during CY 2011 (Source: Websites of exchanges
and FIA data)
20%
8.3%
5.4%
4.5%
4.0%3.3%3.0%3.0%2.9%2.5%
43%Chile
Germany
Japan
Zambia
China
Russian Federation
Rep. of Korea
Poland
Belgium
Australia
Other Countries
25%
7.2%
7.0%
5.8%3.9%3.5%3.3%2.7%
2.6%2.4%
37%
China
Germany
USA
Italy
Other Asia, nes
Rep. of Korea
France
Turkey
Thailand
MalaysiaOther Countries
www.mcxindia.com
Source: MCX R&D
Source: Bloomberg
LME Copper 3 Month Price Vs LME Stock
Pric
e $
/ kg
Stoc
ks in
MT
Source: Bloomberg
MCX Correlation - 99.76%Copper Near Month & LME Cash
0
50000
100000
150000
200000
250000
300000
100
150
200
250
300
350
400
450
500
Volume (MTs) Open Interest (MTs) Price
Apr
-08
Jun-
08Au
g-08
Oct
-08
Dec
-08
Feb-
09A
pr-0
9Ju
n-09
Aug-
09O
ct-0
9D
ec-0
9Fe
b-10
Apr
-10
Jun-
10Au
g-10
Oct
-10
Dec
-10
Feb-
11A
pr-1
1Ju
n-11
Aug-
11O
ct-1
1D
ec-1
1Fe
b-12
Apr
-12
Jun-
12Au
g-12
Oct
-12
Dec
-12
Feb-
13
OI &
Vol
in M
Ts
Pric
e in
` /
kg
0
2000
4000
6000
8000
10000
12000
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000COMEX COPPER LME COPPER SHFE COPPER LME PRICE
Jan-
08M
ar-0
8M
ay-0
8Ju
l-08
Sep-
08N
ov-0
8Ja
n-09
Mar
-09
May
-09
Jul-0
9Se
p-09
Nov
-09
Jan-
10M
ar-1
0M
ay-1
0Ju
l-10
Sep-
10N
ov-1
0Ja
n-11
Mar
-11
May
-11
Jul-1
1Se
p-11
Nov
-11
Jan-
12M
ar-1
2M
ay-1
2Ju
l-12
Sep-
12N
ov-1
2Ja
n-13
0
2000
4000
6000
8000
10000
12000
0
50
100
150
200
250
300
350
400
450
500
MCX LME
Jan-
07A
pr-0
7Ju
l-07
Oct
-07
Jan-
08A
pr-0
8Ju
l-08
Oct
-08
Jan-
09A
pr-0
9Ju
l-09
Oct
-09
Jan-
10A
pr-1
0Ju
l-10
Oct
-10
Jan-
11A
pr-1
1Ju
l-11
Oct
-11
Jan-
12A
pr-1
2Ju
l-12
Oct
-12
Jan-
13
` / k
g
$ / M
T
MCX reaches out to over
1,770 cities and towns in India
through 3,46,000+
trading terminals (including CTCL)
(as of Q3 FY 2012-13)
MCX Copper Volume & Open Interest
www.mcxindia.com
IMPORTANT WEB SITES
www.icsg.org | www.copper.org | www.woodmacresearch.com | www.world-bureau.com |
http://minerals.usgs.gov | www.metalbulletin.com | www.basemetals.com | www.metalprices.com
Symbol COPPER COPPERM
Description COPPERMMMYY
Trading period Monday through Saturday#Trading session Monday to Friday: 10:00 am to 23:30
Saturday:10:00 am to 14:00
Contract listing As per contract launch calendar
Expiry date Last day of the contract month
Trading unit 1 MT 250 kgs
Quotation/base value 1kg
Tick size 5 paise per kg
Maximum order size 70 MT
Daily price limit 4%
Initial margin Minimum 5% or based on SPAN, whichever is higher
Additional and/or In case of additional volatility, an additional margin (on both buy side and Special margin side) and/or special margin (on either buy side or sell side) at such
percentage, as deemed fit, will be imposed in respect of all outstanding positions.
Maximum allowable For individual clients: 5,000 MT;
For a member : 25,000 MT or not more than 15% of the market-wide open position, whichever is higher.
Delivery logic Both option
Delivery center Within 20 Km outside Mumbai octroi limit.
Delivery unit 9 MT with tolerance limit of +/– 1% (90 kg)
Due date rate (DDR) Due date rate is calculated on the last day of the contract expiry, by taking calculation the international spot price of Copper and multiplying by Rupee-US$ rate as
notified by the Reserve Bank of India on that particular day.
Note: Please refer to the exchange circulars for the latest contract specifications and delivery and settlement procedures.
CONTRACT SPECIFICATIONS OF COPPER AND COPPER MINI
open position
#: Day light timing 10:00 to 23:55 (Winter)
MCX is the first commodity exchange in
India to launch mini futures contracts in
various commodities
09
04
13
Multi Commodity Exchange of India LimitedExchange Square, Suren Road, Chakala, Andheri (East), Mumbai 400 093 | Tel. no.: +91-22-6731 8888 | Email: [email protected] | Website: www.mcxindia.com
Customer Support: +91-22-6649 4040 | To get the latest futures prices on mobile: visit http://m.mcxindia.com or sms “MCX <Commodity name>” to 58888