What Is More Valuable Copper Or Nickel?

July 11, 2022

What Is More Valuable Copper Or Nickel?

The pandemic has shaped our lives completely differently in many fields, in economics especially.

Fed data showed it is the worst dip in manufacturing output since the 1940s, although it has since rebounded. The sudden drop in demand had a disastrous effect on employment. The national unemployment rate climbed up to 14.8% in April 2020 before dropping to 6.2% in February 2021. By November 2021, it had dropped to 4.2%. Even worse, the world economy has contracted by 3.1% at the same time. This trend, contrastingly, does affect JJN Nickel and JJC copper in a reverse way.

According to the ETF, JJC tracks an index consisting of a single copper futures contract at a time. The methodology weights the contracts by liquidity (2/3) and US dollar-weighted production (1/3). As the pandemic begins in March 2020, the price of JJC initially plunged significantly, from a close price of 13.50$ on March 1^st to 10.80$ on March 23rd. However, it has recovered rapidly after the plunge to the same level as before the pandemic in June 2020, even though the pandemic still remains unsolved in most of the countries. Surprisingly, after the recovery, the trend continued to rise and soon surpassed the previous average price and reached the unprecedented highest point of 24.7$ in the market. In the recent 12 months, it has dropped 24% to around $18.

Comparably, JJN price was not affected much by the pandemic.

From 2020 when the Covid began, it shows a slowly and steady increasing trend with an average of 25$ until the end of 2021. In March 2022, the JJN price experienced a skyrocket rise and the highest price was as high as 63.25$. It then decreases again to 30$ in July 2022, but it still has a 22% overall increase in the past three years.

Moreover, the reasons why these 2 commodities have shown the phenomenon of increasing instead of decreasing is because more and more people are relying on electricity and online working. And as a result, more and more 5G network station and fiber are required. A Chinese national 5G network will require an average of 72,000 tons of copper. Further, as the price of gasoline is incredibly high, people switch to using electric or clean energy cars as a substitute. Electric vehicles use four times the amount of copper used in internal combustion engines.