Predictably, China is the 800-pound gorilla in Chile’s copper room. China is by far the largest copper-consuming nation in the world and the country imports 70% of its consumed copper.
Unfortunately for ECH, China’s industrial profits slipped the most in two years in November following a 2.1% drop in October. Copper’s slide is also crimping optimistic 2015 forecasts for Chilean stocks. At the end of 2014, analysts polled by Reuters expected Chile’s benchmark IPSA Index to rise 10% this year, but the IPSA is already down more than 2% since the start of 2015.
There are hopes for rebounds for Chilean stocks and ECH. The country is a seen as a winner in a low oil price environment and stocks there are inexpensive relative to historical averages. [An ETF Idea for Low Oil Prices]
iShares MSCI Chile Capped ETF