The three-bar ruler of inflation-copper metal rises strongly
In 2020, the new crown epidemic will sweep the world. In order to resist the epidemic and prevent the economy from being too severely affected, Yangma’s release of water has become a consensus. The low interest rate will continue for some time, and this round of buffalo will bring inflation. What is seeing is the rise in commodity prices.
To talk about the yardstick for measuring inflation, most people think of gold, because of this, gold has a hard currency. The dollar-denominated gold has risen from the lowest of US$1450.9/ounce in March 2020 to the highest of US$2089.2/ounce. Gold hit an all-time high. Since the low of 1450, gold has risen by more than 20% so far.
But in addition to gold, there are international crude oil and metal copper as a measure of hard currency. These two currency scales are both an important part of the US futures market. In the NYMEX (New York Mercantile Exchange) market, crude oil products include light crude oil, heating oil, gasoline, etc., in addition to platinum, palladium and other trading varieties. In the COMEX (New York Metal Exchange) market, in addition to the highlight of gold, there are silver and copper. It can be said that the two important futures markets in the United States mainly deal with precious metals, energy and petroleum, and industrial copper.
Precious metals, energy and industrial metals, using these three-bar scales to measure the degree of global inflation, the accuracy will be greatly improved. These three represent: non-renewable rare metals, one of the world's mainstream energy sources and industrial metals with the most industrial uses. Using these three scales, we can define moderate, sustained and even worsening inflation, and look for investment opportunities from them.
Recently, the news of rising international crude oil prices has swept the screen. The price of WTI crude oil broke through US$60 per barrel, which also led to the rise of A-shares of PetroChina and Sinopec Elephant. This article talks about another inflation yardstick-copper. Copper is an important industrial metal, and it is also a commodity category. Under inflation, it will benefit the rise of copper prices.
Regarding the historical status and importance of copper, the following 4 introductions are from Encyclopedia for reference:
(1) The development history of human civilization has experienced the Bronze Age, and it can be named after the metal copper, which is enough to explain its importance. In addition, the transition between the Neolithic Age and the Bronze Age was previously called the Bronze Age, when copper tools were used with stone tools.
(2) The history of copper use in the Middle East can be traced back to 9000 BC. A copper pendant found in northern Iraq can be traced back to 8700 BC. There is evidence that gold and meteorite iron (except molten iron) are metals second only to copper in humans.
(3) The cultural role of copper is very important, especially in currency. The Romans in the 6th to 3rd centuries BC used copper blocks as currency.
(4) Copper is widely used in instruments, compasses, aviation, aerospace, radar, turbines, bearing bushes, bushings, marine industry, ships, human drinking water pipes, household appliances, various currencies and arts and crafts, shape memory alloys, Super-elastic and shock-absorbing alloys, etc. At the same time, it is used to manufacture all kinds of important parts with high strength, high toughness, high electrical conductivity, high thermal conductivity and high corrosion resistance.
Gold has risen about 20% since the February low, crude oil has risen by more than 800% from a low of $6.5/barrel, and copper has risen somewhere in between. COMEX copper is currently at 3.93 US dollars, the low point in March 2020 is 1.97 US dollars, and the price has nearly doubled in more than a year. At present, American Copper is challenging US$4, which has hit a new high since 2012.
We need to use copper for some products, so we also have to increase the price. If there is a business in need who wants to buy our products, please inquire first.
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