Copper is a widely used base metal known for its electrical and thermal conductivity, strength, ductility and corrosion resistance. It is used across electrical wiring, construction, machinery, power infrastructure and several industrial applications.

Copper is often called “Dr. Copper” because its price is closely associated with economic and industrial activity. Changes in manufacturing, construction and infrastructure spending can influence copper demand.

Major uses of Copper

• Electrical wiring and equipment
• Building construction and plumbing
• Machinery and industrial equipment
• Consumer products
• Decorative applications
• Coins and other industrial uses

The growing focus on electrification, renewable energy and power infrastructure further highlights the importance of copper in the global economy.

Source: International Copper Association

Copper contract on MCX

Here’s the breakdown:  

Source: MCX

Trading hours on MCX

Copper contracts trade on MCX from Monday to Friday, from 9:00 AM to 11:30 PM during US daylight saving time and up to 11:55 PM otherwise. These extended hours allow market participants to track international developments that may influence copper prices during Indian market hours.

What drives Copper prices?

Copper prices are influenced by supply and demand, economic growth, industrial activity, geopolitics and market sentiment.

• Supply and demand: Industrial demand, mine supply, production changes, disruptions and inventory levels can influence prices.
• Global economic growth: Manufacturing, construction and infrastructure activity can increase copper consumption, while economic slowdowns can reduce demand.
• China: Manufacturing PMI, property-market indicators, retail sales and relevant policy developments can provide insights into demand and economic activity. Financial-market and regulatory developments, including relevant CSRC announcements, can also influence market sentiment and growth expectations.
• Technology and energy transition: Electric vehicles, renewable-energy systems, power grids and other electrification-related technologies require copper, making investment in these areas relevant to future demand expectations.
• Geopolitical developments: Political instability, sanctions, trade restrictions or disruptions in major producing regions can affect global supply chains and copper prices.

Copper expiry and delivery

Every Copper futures contract has an expiry date and expires on the last trading day of every month.

The staggered delivery or tender period covers the last three trading days, including expiry. During this period, traders with open positions can participate in the physical delivery process. Open positions remaining on expiry day are subject to compulsory delivery.

End of Settlement (EOS) is the final settlement process conducted by the broker, generally one day before the delivery period begins.

Source: MCX contract specifications

MCX Copper Reference Rate

The London Metal Exchange (LME) is a major global marketplace for industrial metals, including copper. LME copper prices and inventory levels are closely followed across the global metals supply chain. International copper prices and developments in major global markets can therefore provide useful context when analysing domestic copper price movements.

Risks of Copper trading

Copper futures can be volatile and may react quickly to economic data, geopolitical events, supply disruptions and changes in market expectations. Key risks include global economic slowdowns, geopolitical disruptions, weaker Chinese demand and substitution by alternative materials.

Major Copper-producing countries

1. Chile
2. Peru
3. China
4. United States
5. Democratic Republic of the Congo (DRC)
6. Australia

Source: Farmonaut

Conclusion

Copper is closely connected with global economic growth, manufacturing, construction, infrastructure and the energy transition. Before trading Copper on MCX, understanding its contract structure, lot size, trading hours, expiry and delivery framework is important.

Monitoring global copper prices, supply conditions and key indicators, particularly China’s manufacturing PMI, property-market data, retail sales and relevant policy developments, can provide useful context.

So, before you trade Copper, know your commodity.