Exchange traded funds (ETFs) with a copper or mining focus should be aware that the demand for this metal will continue. Economic expansion in BRIC countries such as India and China mixed with the U.S. housing demand will keep the need fueled. Copper is used in every major industry – transportation, housing, and machinery. Over the last few years the price of copper has gone from $0.50 to $6.00, with the benefits going to Chile where copper exports make up 50% of their total exports.
China, the biggest consumer of copper, is expected to import more copper from Chile. China’s industry is growing at a fast pace and will need copper to sustain this growth. Yaser Anwar reports that copper has an unrivaled collection of properties that is difficult to substitute.
Although there isn’t a pure copper ETF, there is the PowerShares DB Base Metals (DBB), which holds one-third each of copper, aluminum and zinc.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.