“While continuing to reduce bullish gold bets, on the copper market hedge funds have pushed long positions – bets on higher prices in future – to new heights. According to the CFTC’s weekly Commitment of Traders data up to January 24 so-called managed money investors have taken net longs to a fresh recorded high of just over 91,000 lots,” reports Frik Els for Mining.com.
Trump’s audacious infrastructure plan, which calls for spending of $1 trillion, has somewhat fallen out of the spotlight amid the administration’s other efforts in recent days, but that plan is widely seen as a catalyst for industrial metals, including copper.
Another ETF benefiting from rising copper prices is the iShares MSCI Chile Capped ETF (NYSEArca: ECH), which is up 4.2% year-to-date. Chile is 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.
“Copper’s recent strength has been spurred by worries over supply disruption from Indonesia where top listed copper producer Freeport’s Grasberg mine facies an export ban and in the globe’s main producing region in Chile. Platts reports on Monday rough seas have closed ports in northern Chile which services some of the biggest copper mines in the country for the fourth day,” according to Mining.com.