Copper-related exchange traded funds jumped Monday as investors raised bets on the improving economy. Meanwhile, Chile, a major copper producer, closed its borders in response to a spike in Covid-19 infections.
Among the better performing non-leveraged ETFs of Monday, the United States Copper Index Fund (NYSEARCA: CPER) was up 3.0% and iPath Series B Bloomberg Copper Subindex Total Return ETN (NYSEArca: JJC) was 3.1% higher. The Global X Copper Miners ETF (NYSEARCA: COPX), which takes a more focused approach to copper miners, increased 2.9%.
Meanwhile, Comex copper futures rose 4.6% to $4.1365 per pound.
Copper is a major component in the global economic engine, attracting large demand from the construction and manufacturing sectors.
Copper prices rallied after an ISM survey for March showed U.S. services industry activity surged to a record high, strengthening bets that 2021 could reflect the best economic growth in nearly four decades. The data also followed Friday’s report that revealed U.S. nonfarm payrolls jumped by 916,000 jobs in March, compared to expectations of 647,000 from economists.
“Vigorous services activity in March sets the stage for robust expansion in the second quarter,” Oren Klachkin, lead U.S. economist at Oxford Economics, told Reuters. “All the right pieces for a faster services recovery – expanded vaccine eligibility, reopenings, and historic fiscal expansion – are falling into place.”
Further adding to the jump in copper markets, Chile, the world’s largest exporter of the metal, is closing its borders during April due to rising coronavirus cases, Mining.com reports.
Chile saw a daily record of 7,830 infections last week, an all-time high for occupied hospital beds, and a countrywide rate of 11% infected.
Consequently, people are forbidden from entering or leaving the Latin American country. The heightened vigilance and increased border restrictions could disrupt mining activities by delaying equipment replacement.
Chilean copper mines extracted 430,100 metric tons in February, a drop of 4.8% compared to the same period of 2020.
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