As global economies continue to improve, manufacturing rises and spending increases, greater demand for copper could keep copper prices and related exchange traded funds (ETFs) at high positions.
Richard Adkerson, president and chief executive of Freeport-McMoRan Copper & Gold (NYSE: FCX), the world’s largest publicly traded copper miner, commented that “export business (and) consumer spending are improving, automobiles (are) strong, so this recovery … is translating into improved demand for copper,” reports Steven James for Reuters.
Adkerson also remarks that Chinese demand should continue to grow on increased infrastructure projects, and he believes that there is a growth opportunity with the incorporation of antimicrobial copper touch surfaces in hospitals and clinics, and other green projects.
Three-month copper on the London Metal Exchange hit $9,784 on Wednesday, almost a three-week high, according to Business Report. While the housing market continues to show weakness, other areas of the economy have improved enough to make up for the extra demand, such as a growing automotive sector and anticipated reconstruction effort in Japan.
While copper prices stalled by the end of the week on weaker U.S. durable goods orders, technical trading has kept copper prices going, and copper futures are now trading above their 50-day moving average for a second day in a row, writes Tatyana Shumsky for The Wall Street Journal. The growing Asian economies and the reconstruction effort in Japan will likely help support copper prices.
Additionally, European industrial orders have increased for the fourth month in January on higher for intermediate goods like car engines and steel, reports Simone Meier for Bloomberg. Orders surged 21% year-over-year, and rose 0.1% from December.
- First Trust ISE Global Copper (NASDAQ: CU)
- Global X Copper Miners (NYSEArca: COPX)
- iPath Dow Jones-UBS Copper Subindex Total Return ETN (NYSEArca: JJC)
For more information on copper, visit our copper category.
Max Chen contributed to this article.
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.