Investors looking for a commodity that is currently scorching hot do not have to look much further than copper. The iPath Bloomberg Copper Subindex Total Return ETN (NYSEArca: JJC) jumped nearly 8% last week.

The red metal, one of last year’s best-performing commodities, until recently, has been hampered by a strong dollar, among other factories. However, speculation about tighter supplies due to labor negotiations in some major copper-producing countries recently sent the industrial metal soaring.

“Workers at the Escondida copper mine in Chile, the world’s top producing mine by a country mile, fired an opening salvo in contract talks with part-owner and operator BHP that makes a quick resolution highly unlikely,” reports Frik Els for Mining.com.

Chile is the world’s largest copper-producing country. Prices of the red metal raced to the highest levels since January 2014 last week on news of the situation at the Escondida mine.

Rebuffing Copper Demand Questions

Previously, some observers pointed out that the escalating trade-war rhetoric may have contributed to protectionist trade policy fears. Traders may have been worried that the slower activity and impediments to free trade would lead to a weaker global economy, which would diminish demand for raw materials like copper. Furthermore, fears of an economic slowdown in China, the world’s largest commodity consumer, and recent data out of Europe and Japan have exacerbated concerns.

The situation in Chile bears watching for copper traders, bulls and bears alike.

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