China’s copper imports rose during the month of October, giving exchange traded fund (ETF) investors an opportunity to consider copper-focused funds.
“China’s copper imports in October rose for a second month, customs data showed on Sunday, as traders took advantage of a short period of favourable pricing to bring in bonded inventories of the metal,” a Reuters article says.
“Arrivals of unwrought copper and products into top copper consumer China were 410,541.3 tonnes last month, the General Administration of Customs said. That was up from 406,015.6 tonnes in September but down 33.6% from a year earlier,” the article adds.
Copper, as seen in the S&P GSCI Copper Price index, got off to a hot start at the beginning of the year as it traded above its 50- and 200-day moving averages. Since then, it’s showed some near-term weakness, falling below that 50-day EMA near the start of the summer.
Close to the end of August through the beginning of October, it started to find some support. Now, it’s trading above its 50-day moving average again, which could signal more strength in the short term.
Looking at momentum via the relative strength index (RSI), it’s sitting right in the middle of overbought and oversold levels. This could be a crucial price discovery point that could portend to how copper responds through the end of the year and into 2022.
A Play on Copper Miners
ETF investors looking to make a play on increased copper demand can do so via miners. As such, one ETF worth looking at is the Global X Copper Miners ETF (COPX).
COPX seeks to provide investment results that correspond generally to the price and yield performance of the Solactive Global Copper Miners Total Return Index, which is designed to measure the broad-based equity market performance of global companies involved in the copper mining industry.
“This ETF gives investors an opportunity to achieve exposure to copper without encountering the nuances of a futures-based strategy,” an ETF Database analysis suggests. “For investors looking to bet on increased demand for a raw material used widely in various applications, COPX is a nice option. COPX often trades as a leveraged play on the underlying natural resources, meaning that this fund can experience significant volatility but be a powerful tool for profiting from a surge in commodity prices.”
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