Copper Analysis: As Escondida Mine Talks Advance, Copper Could Fall to $3.17
June 15, 2018 9:41 am
Copper is one of the most important metal in the world. Its excellent heat conduction characteristics make it ideal for electrical work. Only silver has better conduction characteristics, but its use has not been widely accepted because of its cost. Copper is ductile and malleable, which makes it easier to fold and twist. Every day, billions of people from around the world use copper knowingly or not. For example, copper is used in the national grid which provides electricity to billions.
In recent years, price of copper has surged as the shift from combustion engine vehicles to electric has increased the demand of copper. EVs use more copper than the traditional vehicles. In addition, as China shifts from coal and other non-renewables in major cities, the demand for copper has increased.
Another major issue on copper was the recent strike by employees of BHP, one of the largest copper miners in the world. Employees at the Escondida mine in Chile have been protesting low pay for months. Last year, their strike cost the company more than $1 billion after the employees shut it down for 44 days. This week, the company announced that it would start a new round of negotiations with the employees who have demanded a 5% salary increase and a one-time bonus of $34,000. The latter is equivalent to four percent of the dividends distributed to shareholders.
This week, copper prices continued to rise, reaching $7,348, the highest level since 2014 as traders placed their bets on increased friction between the two sides.
Copper has reached $3.2148 per ounce. This is slightly lower than the metal’s recent high of $3.31. It is trading below the 50 and 25-day moving average. The RSI in the 4-hour chart below is 39 and is currently heading lower. As the two sides continue negotiations, there is a likelihood that the price of the commodity could fall slightly, potentially to the $3.17 level.
Copper is one of the most important metal in the world. Its excellent heat conduction characteristics make it ideal for electrical work. Only silver has better conduction characteristics, but its use has not been widely accepted because of its cost. Copper is ductile and malleable, which makes it easier to fold and twist. Every day, billions of people from around the world use copper knowingly or not. For example, copper is used in the national grid which provides electricity to billions.
In recent years, price of copper has surged as the shift from combustion engine vehicles to electric has increased the demand of copper. EVs use more copper than the traditional vehicles. In addition, as China shifts from coal and other non-renewables in major cities, the demand for copper has increased.
Another major issue on copper was the recent strike by employees of BHP, one of the largest copper miners in the world. Employees at the Escondida mine in Chile have been protesting low pay for months. Last year, their strike cost the company more than $1 billion after the employees shut it down for 44 days. This week, the company announced that it would start a new round of negotiations with the employees who have demanded a 5% salary increase and a one-time bonus of $34,000. The latter is equivalent to four percent of the dividends distributed to shareholders.
This week, copper prices continued to rise, reaching $7,348, the highest level since 2014 as traders placed their bets on increased friction between the two sides.
Copper has reached $3.2148 per ounce. This is slightly lower than the metal’s recent high of $3.31. It is trading below the 50 and 25-day moving average. The RSI in the 4-hour chart below is 39 and is currently heading lower. As the two sides continue negotiations, there is a likelihood that the price of the commodity could fall slightly, potentially to the $3.17 level.
The post Copper Analysis: As Escondida Mine Talks Advance, Copper Could Fall to $3.17 appeared first on Forex.Info.
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