Stay long on copper ETF's revenue from supply shortages

Stay long on copper ETF's revenue from supply shortages 

It requires less discussed the impact of this metal anywhere in the world economy by virtue of its widespread use in the automotive and distribution areas, these two important sectors, without a healthy mineral supply will cease to exist. Growth momentum, which is once again drawn copper commodity investment limelight, most analysts are betting on this year's major supply shortages. China's middle-class population and housing surge in demand is the biggest indicator of the beginning of 2001 was mainly about the upcoming copper rebound. 

To the asset will be a fun way to blue chip stocks are expected to outperform the return of the physical metals market is the case of the outbreak of the global copper mining company. The rally displayed on copper demand accounted for 46% of global copper consumption, and if metals analyst at Barclays believe that China's domestic demand in 2013 will exceed domestic production leave a supply deficit of a good support circumstances, since at least 2.2 million tons of copper. 

Global demand for copper as a commodity has a great amount, but the same can not be said metal supply drops. A large list of practical use (requires auto parts, wiring and plumbing, etc.) so that it is definitely the most useful industrial metals and restricted use and volatility characteristics, such as associated with gold traders in the selection grade behind them, looking for a metal there is more to it than just in terms of price volatility and speculation. The rise in spot prices is likely to be an indicator of economic growth. On a global scale construction is a sector, the use of metal in a big way. 

Chile and China are the top producers of this metal, the former has 20% of world reserves. The next line is Peru and the United States. 

Exchange-traded products have been difficult to obtain exposure, and put it in front of investors a simplified package as before it is an asset class. There are futures contracts, but also physical backup products (gold), stocks (centralized mining, exploration and refining company, often subject to extensive and complete market conditions), people who are interested and want to gain exposure to equity-traded fund (ETF) copper miners shares. Exposure to a commodity portfolio will ensure that reduce risk. It helps to hedge against inflation and liquidity positions provide sufficient leeway. 

At present, China seems more than half of global copper consumption, making it possible to produce global scarcity of the metal. This will surely lead to the upgrading of the commodity prices; now trading around $ 3.50 per pound.