Record-high demand, primarily as the world’s top copper consumer goes on a commodities shopping spree, has led to a surge in both the price of copper and the related exchange traded note (ETN).
China, the world’s top copper consumer, has driven the demand for the metal to new highs, up $2.44 per pound as of Thursday. This demand may be a response to the media reports stating that Chinese industrial production rose by 8.9 % in May from a year earlier, reports Chris Kelly for Reuters.
The Chinese have been stockpiling an array of commodities, including aluminum, copper and nickel, reports Keith Bradsher for The New York Times. Although the stockpiling of metals is currently for strategic reasons, it’s still helped reverse the falling commodity prices in recent months.
The metal is an indicator of future global growth because of its use in plumbing and wiring. In the first quarter of this year, copper rallied 31% and was the second-best performer after gasoline.
- iPath Dow Jones AIG Copper TR Sub-Index ETN (JJC): up 73.2% year-to-date
For more stories on copper, visit our copper category.
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.