The iPath Bloomberg Copper Subindex Total Return ETN (NYSEArca: JJC) is one of this year’s best-performing commodities exchange traded products and that trend is benefiting shares of copper miners. Just look at the Global X Copper Miners ETF (NYSEARCA: COPX).
COPX, which tracks the Solactive Global Copper Miners Index, is higher by more than 27% year-to-date. Industrial metals like copper, nickel, iron and steel have all rebounded in recent months as traders bet on improving global economic conditions would bolster demand for the base metals after prices hit multi-year lows.
“Copper itself now up 20 percent year-to-date with all of that gain coming since early May; flirting with its highest level since November 2014,” reports the Times of India. “Some are attributing base metal’s strength to stronger-than-expected economic growth in China, as well as U.S. Dollar weakness.”
The dollar is one of this year’s worst-performing major currencies. Home to almost $47 million in assets under management, COPX debuted more than seven years ago. The ETF holds just 27 stocks and is a heavily ex-US fund. Canada, Australia and China combine for about 52% of the ETF’s weight. Other countries featured in the COPX lineup include Chile, the world’s largest copper producer; Poland, Peru and India.
“That said, the Dollar and Dr. Copper are dancing on the edge going into the Jackson Hole central banker conclave that begins Thursday,” according to the Times of India. “Technically, COPX formed a bullish inverse head & shoulders (H&S) pattern from late 2015 to late 2016.”
Related: Copper Investing Call Still Looks Good
Copper prices are benefiting as investors anticipate greater demand out of China and increased infrastructure projects under President Donald Trump. Some professional traders are reacting by increasing bullish bets on the red metal.
A near-term issue for copper is the ability of the Trump Administration to get its ambitious infrastructure efforts off the ground, something many market observers believe will not happen until next year. Additionally, if that effort does not approach the $1 trillion in expenditures promised by the president on the campaign trail, markets could be disappointed.
Trump’s audacious infrastructure plan 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.
For more information on Copper ETFs, visit our Copper category.