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HG1! trade ideas

Copper's Short-Term Demand Woes, Long-Term GapsCopper is known as the electrifying metal. Copper's warm glow and durable spirit, copper wires the heart of many a machine. This reddish rarity has been super bullish in the recent past but less so now. That doesn't make it less investable. Just that nuanced investing approach is called for. Outlook for copper has become mixed once more, with near term demand remaining downbeat given the continued slowdown in the Chinese property market and buildup in copper stock at SHFE. In the longer term, supply challenges risk pushing copper into a supply deficit with major copper miners Codelco and Anglo American facing supply challenges. Given the mixed outlook, copper has continued to trade in a tighter price range over the past two months. Counter to conventional wisdom, a sideways market also presents opportunities for savvy investors. This paper describes the diverging outlook for the red metal and how investors can deploy a calendar spread using CME Micro Copper futures amid the diverging short and long-term outlook. CHINESE COPPER INVENTORIES BUILD UP BECAUSE OF DEMAND SLOWDOWN Chinese copper inventories have surged to one of their highest historical levels. Furthermore, inventories have been rising during the part of the year associated with drawdowns. Source – Bloomberg Lower demand is one of the factors behind the increasing inventories. The Chinese real estate sector is a major consumer of copper. With the ongoing slowdown in the sector, copper demand has been hit hard. Moreover, manufacturing sector in China is also experiencing a slowdown as China’s official manufacturing PMI dipped back into contraction in May. Source: TradingEconomics Combination of property market slowdown and lower industrial activity is hindering copper demand in the near term. Furthermore, refined copper production among Chinese copper smelters has remained near all-time high levels over the past few months. Source: Bloomberg BULLISH SUPPLY SIDE AND INDUSTRIAL RECOVERY POSE UPSIDE TO COPPER While near-term demand outlook may be downbeat, the medium- and long-term outlook for copper remain bullish. In the medium term, higher demand from the rapidly growing PV (photovoltaic) manufacturing and EV industry are absorbing some of the higher copper supply. While both industries have slowed in recent months, analysts expect them to recover. At their current pace of copper consumption, these industries are more than compensating for the slowdown in the property market. Source: Reuters Additionally, major copper miners, Codelco and Anglo American are dealing with lower production. Codelco, the world's largest copper producer, reported a 9.4% decline in production in the latest quarter compared to the previous year. This decline is attributed to falling ore grades, water restrictions, union protests, and logistical challenges exacerbated by the global situation, including the pandemic and geopolitical tensions. Anglo American also announced plans to reduce its copper production in 2024 as part of a strategy to cut costs and adapt to market conditions. Lower output from major copper miners is a cause for concern given the rapid pace at which the new energy industries such as EVs and PVs are growing as well as the rapid growth in data centers which require substantial amount of copper. With inadequate supply, copper supplies face the risk of being pushed into a deficit. ASSET MANAGERS HAVE REVERSED VIEW ON COPPER BULLISHNESS While asset managers had built up substantial long positions during the sharp rally in copper which took price to an all-time high, they have started to close some of those long positions indicating that in the near-term price may have run ahead of themselves. Source: CME QuikStrike Over the past week, September CME options have seen a buildup in puts while calls have declined. The November contract has seen a similar trend. However, the March 2025 contract has seen a surge in call OI. Source: CME QuikStrike In a similar vein, CME copper future’s term structure has shifted from a steep contango to backwardation over the last three months. However, over the past week, this has started to shift once more as premium of later contracts over front month has started to rise leading to a steepening term structure. HYPOTHETICAL TRADE SETUP Given the diverging outlook for copper in the near-term and later term, investors can express a view on the shift in term structure using a calendar spread consisting of CME Micro Copper futures. The below hypothetical trade setup consists of a long position in Micro Copper futures expiring in March 2025 (MHGH2025) and a short position in Micro Copper futures expiring in August 2024 (MHGQ2024). Investors can also deploy the same trade setup using CME full-size copper futures. The CME full-size copper futures also provide a margin offset for the trade, a calendar spread with the same contract can be deployed with maintenance margin of USD 2,500 as of 24/June. The below hypothetical trade setup provides a reward to risk ratio of 1.43x. Entry: 1.011 Target: 1.055 Stop Loss: 0.98 Profit at Target: USD 492 Loss at Stop: USD 342 Reward to Risk: 1.43x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
COMEX:HGH2025Long
by mintdotfinance
Copper: A Retracement Everyone Should Be WatchingDespite recent inflation slowdowns, we anticipate a new era where the consistent demand for raw commodities triggers temporary supply disruptions, potentially leading to significant returns for investors in tangible assets. While Crude Oil offers the broadest inflation protection and Gold protects against stagflation (rising inflation with declining economic growth ), Industrial Metals, such as Copper, provide a perfect mix in this new green energy era. Having the right mix of commodities in a diversified portfolio can help offer protection against a wide range of uncertainties. The Demand Structure is Changing There is a push for increased electric power use because the green energy revolution, rising EV Vehicle demand, and advancements in AI have all strained the out-of-date electrical grid. The combination pushes demand for copper, silver, and other metallic metals higher for the first time in a decade. That comes at a time when increased regulation makes it harder to bring on additional supply. Taking it to the Charts After a historical rise in the first half of 2024 fueled by excess speculation, open interest has recently declined to more normalized levels, leading to a 50% price correction from the February 9 low of $3.70/lb to the May 20 high of $5.19/lb. We see an attractive risk-reward dynamic using calculated options such as Bull Call spreads or outright call options to speculate on a price recovery. We firmly believe that a "Commodities Supercycle" is underway. www.tradingview.com CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
COMEX:HG1!Long
by Blue_Line_Futures
Elliott Wave Analysis on Copper (HG) Expects the Metal Turning HShort Term Elliott Wave in Copper (HG) suggests the metal has ended wave (4) correction at 4.375. Wave (3) rally ended at 5.2 on 5.20.2024 which is all-time high price for Copper. Wave (4) pullback unfolded as a double three Elliott Wave structure. Down from wave (3), wave W ended at 4.7435 and wave X ended at 4.903. Wave Y lower subdivided into a zigzag structure where wave ((a)) ended at 4.571 and wave ((b)) ended at 4.696. The 45 minutes chart below shows wave ((b) on the left side of the chart. Down from there, wave (i) ended at 4.518 and wave (ii) ended at 4.687. Wave (iii) lower ended at 4.431 and rally in wave (iv) ended at 4.612. Final leg wave (v) ended at 4.375. This completed wave ((c)) of Y of (4) in higher degree. The metal has turned higher and the rally looks impulsive. Up from 4.37, expect wave (i) to end soon, then it should pullback in wave (ii) to correct the short term rally from wave (4) before it resumes higher again. Near term, as far as pivot at 4.375 low stays intact, expect dips to find support in 3, 7, 11 swing for more upside.
COMEX:HG1!
by Elliottwave-Forecast
What Declining Copper Price is telling us?From recent high to current close, copper prices have declined nearly 14%. Copper is one of the most used elements in various industries and its declining price indicates decreasing demand which in turn indicates the slowing economy. Historically, slump in copper prices precedes stock market correction and with valuations being so high, it is wiser to book your profits and sit on a pile of cash and wait for a good dip when you will be able to buy the same stocks you are holding now at cheaper price. However, no one can guess when the actual meltdown is going to start. So keep an eagle eye on your chart. As for as Indian market is concerned, it is expected to follow global cues as of now and you might see a moderate gain in indices today. However, when Zeta Stock Scanner starts showing you more red stocks than green on daily chart, it would be time to book your profits and make an early exit. For today, Grasim, Trent, GMRInfra, BEL, Titan and of course Mazdock seem to be all set to gain some more points. Happy Trading.
COMEX:HG1!
by jellygill
How to determine how far a correction will goTo assess the extent of a market correction, I examine the price action around Fibonacci retracement levels and use the RSI for additional confirmation. On the Comex Copper futures chart, the market has executed a 50% retracement and bounced significantly from that level. The RSI has corrected its overbought condition and is attempting to stabilize around the 40 level. I am optimistic about a potential recovery from here but will need further confirmation from either the RSI or the price action. The RSI could still fall and test the 30 level. At this stage, we cannot rule out a 61.8% retracement, though a 78.6% retracement seems unlikely given the current RSI position. Disclaimer: The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
COMEX:HG1!Education
by The_STA
1
COPPER Going well according to our long-term plan.Last time we looked at Copper (HG1!), we established our long-term strategy (April 19, see chart below), which involves a new Bull Cycle, through a Channel Up pattern similar to 2020 - 2021: So far the plan goes flawlessly, as the price hit the top of the (green) Channel Up and is now pulling back. The 1W MA50 is about to complete a Golden Cross with the 1W MA200, the first one since January 11 2021! On the shorter term (current chart on 1D) the price is approaching the 1D MA50 (blue trend-line), which is the short-term Support but as with last time, we expect it to marginally break before Copper bottoms and makes a new Higher Low on the long-term Channel Up. To those who missed an early buy, we recommend entering once the 1D RSI hits its Support Zone. Our medium-term Target is 5.200 (Resistance 1). ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
COMEX:HG1!Long
by TradingShot
US Copper Futures Soar to Record HighsUS Copper Futures Soar to Record Highs • Copper futures hit a new all-time high • Renewable energy, electric cars, and AI bolster copper’s demand outlook • The outlook for copper looks promising Copper futures hit a new all-time high Copper soared to a new record high, continuing a months-long rally fueled by financial investors who have entered the market expecting supply shortages. Copper prices have been soaring since the beginning of this year, rising by 29% year-to-date. Copper futures at COMEX traded at $5 per pound as of 15 May, marking the highest level since March 2022, when the base metal's price reached an all-time high. The global copper market is experiencing significant turmoil due to a substantial squeeze in the New York market, where prices hit an all-time high last week. The short squeeze caused prices on the Comex exchange to reach an unprecedented premium over the LME, prompting a scramble to redirect metal supplies to the US. Renewable energy, electric cars, and AI bolster copper’s demand outlook Copper prices have surged recently due to increasing optimism regarding lower interest rates and stimulus measures from top importer China. Additionally, expectations of tighter supplies, resulting from production cuts in China and stricter sanctions on Russian metal exports, have driven buying interest in copper. This surge in copper prices is primarily driven by its crucial role in growing industries, including electronic vehicles and AI chip manufacturing. This growing demand is particularly pronounced in China, whose economy is still regaining momentum in these key industries. Demand is outpacing new supply for now, furthering the rapid rise in futures prices. The Chinese market is expected to see inventories withdrawal soon with exports rising," Gong Ming, an analyst with Jinrui Futures Co, said to Bloomberg. Outlook for copper looks promising According to S&P Global: "Copper prices are anticipated to ascend in the long term as a result of the clean energy transition, notwithstanding prevailing short-term apprehensions." The organization forecasts that copper demand will double, reaching 50 million metric tons by 2035. The most significant demands are expected to emanate from the US, China, Europe, and India. According to Statista, total copper mine production amounted to approximately 22 million metric tons in 2023, up from 16 million metric tons in 2010. Projected growth suggests that worldwide production will reach 30 million metric tons by 2036, assuming production continues at the same pace. However, this projected increase falls significantly short of the anticipated surge in demand. Meanwhile, the copper mining industry is set for a slowdown in the upcoming year. A report by Goldman Sachs indicated that investment in mining companies in 2022 was nearly 50% lower than the expenditure in 2010. Disruptions in copper mines, often occurring in Latin America, could result in a widening deficit in copper supply from 2024 onwards.
COMEX:HG1!
by CFI
Africa the new Chinese Copper ColonyThis day has seen the price differential between the COMEX and the London Metal Exchange (LME) seen as a support for the consolidation of the UK market. The copper market has been experiencing tensions due in part to the closure of one of the most important mines in Latin America located in Panama, coupled with the reduction of production forecasts from several suppliers. China's focus on lending, investment and trade with Africa as a whole has generated a beneficial exchange in which billions of dollars have been committed to construction projects led by President Xi's Silk Road initiative. Chinese investments in Africa increased by 114% according to Australia's Griffith University, where their focus is highly concentrated on extracting minerals for the energy transition and China's plans to lead and revive its own economy. Such trade also requires oil, agricultural and manufacturing products, as China's deficit has ballooned. Public-private infrastructure development (PPP) loan agreements appear to be China's channel for acquiring raw materials in exchange for finished goods. Recently, the American Enterprise Institute, a Washington think tank, reported that investments from 2023 to 2025 have been increasing to $11 billion, of which $7.8 billion went into mining, such as the Khoemacau copper mine in Bostwana, which China's MMG Ltd acquired for $1.9 billion, as well as lithium and cobalt mines in countries such as Namibia, Zambia and Zimbabwe. The hunt for critical minerals has also extended to the Democratic Republic of Congo (DRC), where the Chinese government is developing the Atlantic coast corridor called the Lobito Corridor, to send metals from Zambia to Congo, the development of the Nairboi Expressway, the development of automobile tracks in Kenya or the railroad line that was cancelled in Uganda. What can be detected in the Chinese economic model is the generation of a hyperdependence of “colony-metropolis” that was previously occurring with European countries such as France, or the United States in those countries, and this control of monetary power is being transferred to China. Looking at the July copper futures chart, there has been a gradual escalation in price since February, where major African contracts with China through the BRICs began to be backed by Gold and intensified, and this forced the repatriation of millions of dollars sitting in fort nox bunkers and respective domestic warehouses in the US. It would not be unusual to see a price contraction to previous areas of 383 because the demand for copper has been able to match pure speculation prices of 2022, where there is no real demand to cover that supply, because none of the technology consuming countries are at their best. This, added to the inflation problem, may be affecting and causing copper to remain bullish, just like the rest of the metals. But not because of real market demand, but because of inflation. Its high of 519.75 could be pierced again because of inflation, but as soon as inflation is corrected if market demand remains as poor, copper will fall in price to plummeting lows. In any case, a bullish continuation is very feasible in the short term. Ion Jauregui - AT analyst ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
CShort
by ActivTrades
Copper: The Next Big Boom - Prices Could Skyrocket to $40,000Hedge fund manager Pierre Andurand predicts that copper prices could surge to $40,000 per tonne in the coming years due to soaring demand. Currently priced at around $11,000 per tonne, copper has already seen a 20% increase this year. The demand is driven by the electrification of various sectors, including electric vehicles, renewable energy sources, military uses, and data centers. Andurand, who manages approximately $2 billion in assets at Andurand Capital, forecasts this dramatic rise based on the doubling of demand growth for copper. He acknowledges that although a supply response is expected, it will take more than five years to materialize. This sentiment is echoed by former Goldman Sachs executive Jeff Currie, who also predicts significant price increases, albeit to a more conservative $15,000 per tonne. The transport sector's copper demand is projected to grow over 11 times by 2050, with electric vehicles alone requiring substantial amounts of copper wiring. Additionally, the expansion of the global electricity grid will necessitate a 4.8-fold increase in copper demand by 2050. The copper supply gap is projected to reach 10 million tonnes by 2030, as per BloombergNEF estimates. Despite not being widely known in the US, Andurand has a solid track record in commodities trading, with his funds experiencing an 83% increase in value this year. The rising copper prices reflect broader trends in the metals market, driven by strong demand and historically low inventories. Significant growth in copper demand is also anticipated from developing countries, particularly China, India, and Indonesia, which are experiencing exponential increases in consumption.
COMEX:HG1!Long
by signalmastermind
HG Copper Futures LONGHG - copper demand is higher this year as the economy expands globally. On the 60 minute chart price hit a high pivot on May 15th and pulled back in a standard Fib 0.5 fhsion. Price has touched the upper boundary of that support three times and has now printed a wide range green HA candle. I believe that this is a reversal pattern and will take a long trade here targeting the pivot high mentioned. This is a 5% expectant profit amplified by the leverage of a futures trade.I see this as a safe trade of a commodity that has a bullish bias overall. I am also looking for some increased volume at this juncture to assure that some buying momentum is coming into the market.
COMEX:HG1!Long
by AwesomeAvani
Copper Prices Refresh All-Time HighsTechnicals Suggesting a Correction to Support for Copper The metals complex has been on fire; copper futures (COMEX) recently touched gloves with a fresh record high of $5.1990 per pound. This followed last week printing its largest one-week gain (+8.3%) since early February 2022. You may also note that the metal shook hands with a 1.272% Fibonacci projection ratio at $5.1060 (many harmonic traders will view this as an ‘alternate’ AB=CD ratio) and, as of current prices, price action is forming what many technical analysts will recognise as a bearish shooting star candlestick formation. Should a correction occur from current prices, as suggested by the chart’s Relative Strength Index (RSI) closing in on levels not seen since May 2021 (indicator resistance at 83.82), support warrants attention at $4.8890. What is Driving the Metals Markets? This is a tricky one at the moment. The surge in copper could be based on the expectation of Chinese demand. According to a post from Reuters, ‘China's finance ministry plans to start raising 1 trillion yuan ($138 billion) in long-awaited, long-term special treasury bonds this week to raise funds it will use to stimulate key sectors of its flagging economy’. Fuelling further buying, of course, will be speculation and the Fear of Missing Out (FOMO). It is also interesting to see the price of gold refresh all-time highs of $2,450 simultaneously, as copper and gold tend to offer different economic signals. Some desks claim central bank buying is behind the rally in gold.
COMEX:HG1!Long
by FPMarkets