Copper signals a breakout packed with significant growth for the future. What should traders keep in focus?

Copper is the next green option in electric vehicles(EVs).

There is a strong ramp-up in sales for EVs in the market due to the strong growth in China’s manufacturing sector. Copper demand has been predicted to grow for the remainder of the decade however there are limiting factors to this due to innovations in EVs according to 2 recent forecasts.

The metal Copper is now being categorized as the new green energy element due to the wiring required in electric vehicles. EVs can use as much as 80 kgs of Copper, this is 4 times the amount used in the normal combustion engine-powered vehicle.

As per reports emanating from the Goldman Sachs base, EVs account for two third of the global demand growth in copper last year.

However, Goldman Sachs predicts that the average amount of copper in an EV will decrease to 65 kg per vehicle by 2030 from its previous prediction of 73 kg.

However, employing thinner copper foil in battery cells and switching to higher voltage systems that require less cabling are among the engineering advancements that will result in more compact batteries that do not need to be linked into modules.

Electric vehicle manufacturer, Tesla expects that by moving to a 48-volt system for the secondary battery, the smaller battery used to power functions like lighting and wiper in the future EVs. It would be able to cut the need for copper to one-quarter of current levels, Elon Musk said to investors in May.

According to forecasts from Goldman Sachs, the demand for copper for electric vehicles is predicted to reach 1 million metric tonnes this year and 2.8 million by 2030. Previously it was projected to be 3.2 million metric tons of demand from EVs in 2030.

However, against all this data, there is a higher penetration rate of EVS in the market making up for easing copper usage in each unit. Taking exemptions, rebates, and a mentality to adopt clean energy will drive copper demand further.

Let’s move on to the technical outlook of copper.

Technical Outlook:

Inverted head and shoulder pattern for copper

Cooper is forming an inverted head and shoulders pattern. Will it break out?

For traders wishing to know, an inverted head and shoulder pattern is quite similar to the standard one, but it’s inverted. In its simplified form, it is used to predict reversals in the downtrend and upon its completion, it signals a bullish market.

Copper has been trading in the range for a long time now in between ranges from 710 to 730.

Will either side break or close?

This shall be decided in the future, and on the other hand, China’s stimulus package is anticipated. This data will decide if there are chances for upside movement in the copper.

If copper moves to the upside, then it could witness a bounce and we will get the chance to sell around a range between 775 – 780

More changes are expected in the upcoming days

We’ll be back with more info soon.

Until then, Happy Trading!!

Commodity Samachar
Learn and Trade with Ease