Copper futures bounced back Tuesday, with copper miner stocks and sector-related exchange traded funds leading the charge, on hopes of increased demand as China expands its stimulus measures.
The iPath Dow Jones-UBS Copper Subindex Total Return ETN (NYSEArca: JJC), an exchange traded note, rose 1.0% Tuesday after falling off 8.1% over the past month.
COMEX copper futures were up 0.6% Tuesday, trading around $2.74 per pound after falling over the previous six sessions, its longest losing streak since the start of March.
Additionally, the producers equities-backed First Trust ISE Global Copper Index Fund (NasdaqGM: CU) jumped 4.1% Tuesday while the Global X Copper Miners ETF (NYSEArca: COPX) surged 4.2%. Over the past month, CU declined 12.9% and COPX fell 11.4%.
China’s central bank announced it will allow lenders to issue certificates of deposits to individuals and companies, and the bank will add cheap funds to the finance system, reports Debarati Roy for Bloomberg.
“China is the biggest story for metals, so any kind of steps taken by the government is always positive for copper,” David Meger, the director of metal trading at High Ridge Futures LLC, said in the article.
The improving Chinese economic outlook is also bolstering copper assets, which slumped over the past on growth concerns in China, the world’s largest consumer of industrial metals.