ETF Trends
ETF Trends

Copper prices, along with related exchange traded funds, are under pressure again on ongoing concerns over the Chinese economy and potential cuts in Fed stimulus.

The iPath DJ-UBS Copper TR Sub-Idx ETN (NYSEArca: JJC) was down 0.7% Wednesday. The exchange traded note has declined 18.2% year-to-date.

“The potential scaling back of stimulus measures (by the U.S. Fed) and discouraging signs out of China have been a drag on metals prices across the board,” Ross Strachan, economist at Capital Economics, said in a Reuters article.

Chinese demand for copper makes up about 40% of global copper consumption. Copper prices recently plunged on concerns that China’s central bank was tightening cash in an attempt to mop up excessive credit growth. [China ETFs Plunge After PBoC Says Liquidity ‘At a Reasonable Level’]

“Looking at fundamentals it would suggest that there is further downside for copper,” Strachan, added. “We expect prices to fall below $6,000 a tonne next year due to additional mine supply and the weak state of demand.”

LME 3 month copper futures were trading around $6,795.00 per metric tonne Wednesday.

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