Copper is the oldest metal used by mankind, dating back to 8000 BC. Today, the red metal is seen as the key to a greener and climate-neutral world. The massive push to reduce CO₂ emissions will boost the demand for copper sustainably and permanently, as it is an irreplaceable component of all renewable energies and is also used in all electrical appliances, computer chips and e-cars. Therefore, the price of copper is seen as an indicator of global economic development, as it must be used precisely in all household appliances, electric vehicles and renewable energy products. In this regard, China is the world’s largest copper consumer, consuming about half of the world’s production.
Because of copper’s widespread use and its sensitivity to economic cycles, it is also known as “Dr. Copper.” Its price trend has the ability to provide early warnings about the future of the economy. Therefore, a drop in the price of copper is seen as a harbinger of an economic slowdown or even a recession. Thus, it is also a popular way for hedge funds to speculate on a slowdown in global growth through the use of copper short derivatives. In addition, it should always be taken into account that a stronger dollar also weighs on copper, as it makes it more expensive for holders of other currencies to buy copper.