The China’s government is taking steps to shore up its weakening economy, lifting copper exchange traded notes, with the base metal’s prices ending at its largest weekly advance in six months.
The iPath Dow Jones-UBS Copper Total Return Sub-Index ETN (NYSEArca: JJC) was up 1.5% Friday and increased 3.2% since the close last Friday.
Meanwhile, COMEX copper futures were up 1.5%, trading around $3.0385 a pound. This week, the metal has gained 3.1%, the most since Sept. 30, reports Luzi Ann Javier for Bloomberg.
Copper prices are rising on speculation that the Chinese government will begin stimulating the economy, particularly with increased spending on railways and roads to support business development. [Doctor Copper Seeing Just One Patient: China]
“There’s a lot of speculation that China may inject liquidity into the system because they’ve run into some economic troubles recently,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in the article. “They’ll also increase spending in new projects, and you’re going to see copper demand start to rise.”
Moreover, copper prices are rising due to diminished production out of Chile. According to Chilean mining company Codelco, the world’s largest copper producer, production dropped to a five-year low, the Associated Press reports. Anglo American in Chile has also been dealing with disruptions due to strikes.