“The low price environment has triggered some plans to cut back production, so this is short term support for copper prices,” analyst Chunlan Li of CRU told Reuters. “For next year, we think the price could touch lower because the macro environment is not good and the USD is strengthening. Demand is picking up a little bit but it’s not very strong … meanwhile miners are cutting costs which is cutting price support.”
Another beneficiary of rising copper prices is the iShares MSCI Chile Capped ETF (NYSEArca: ECH). ECH, the lone ETF dedicated to tracking equities in the world’s largest copper-producing country. Although Chile is viewed by some market observers as the most advanced and open South American economy and it is undeniably home to Latin America’s highest sovereign credit rating (AA-), there is also no denying the country’s dependence on copper exports as a driver of government revenue. [A Chilly View on the Chile ETF]
iPath Dow Jones-UBS Copper Subindex Total Return ETN
