Positive Trade Information out of China Fuels Copper ETF Surge

Jacob Harper |

On Aug 8 China released their much anticipated trade numbers that would provide concrete information over the economic health of the country. Prior to the release of the trade data, China bears had been speculating that China’s “credit binge” would finally catch up with the country, and cause an economic contraction, or even a crash.

The numbers released by Beijing, however, were anything but dire. Both exports and imports increased considerably more than analysts had expected, and the country’s construction boom is expected to continue.

The continuance of the construction uptick is of particular importance in fueling demand for copper, as China is the world’s leader in copper consumption. Previous fears that growth would slow and China would pull back on consumption had caused copper prices to drop over 20 percent on the year.

With the positive numbers out of Beijing on Aug 8, copper surged. Copper ETFs in turn experienced a spike. iPath Dow Jones UBS Copper Total; Return Subindex (JJS) went up 2.66 percent to hit $40.12 a share.  It’s still down 12.72 percent on the year, however.



United State Copper Index (CPER) went up 2.53 percent to hit $22.25 dollars a share. First Trust ISE Global  Copper Index Fund ($CU) was the biggest gainer among copper ETFs, jumping 4.82 percent to his $21.09 a share.

China will relase more economic data on Aug 9, encompassing inlfation, retail numbers, and industrial output.

inflation, industrial output, fixed-asset investment and retails sales data - See more at: http://www.equities.com/editors-desk/economy-markets/economic-data-news/is-china-poised-for-a-crash#sthash.upC1lpFo.dpuf
inflation, industrial output, fixed-asset investment and retails sales data - See more at: http://www.equities.com/editors-desk/economy-markets/economic-data-news/is-china-poised-for-a-crash#sthash.upC1lpFo.dpuf
inflation, industrial output, fixed-asset investment and retails sales data - See more at: http://www.equities.com/editors-desk/economy-markets/economic-data-news/is-china-poised-for-a-crash#sthash.upC1lpFo.dpwhich will likely affect copper prices once again.

Copper has been on a streak in August, Although analysts have tempered expectations slightly by pointing out there will likely be a surplus of the metal in 2014.  Amid pessimism concerning the Chinese economy, on July 30 copper had dropped as low as $3.05 a pound. Copper rose to $3.23 a pound on the day.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
BPPUF Unione Di Banche Italiane SpA 3.80 0.00 0.00 0
CU First Trust Indxx Global Natural Resources Income n/a n/a n/a 0 Trade

Comments

Emerging Growth

Goldrea Resources Corp.

Goldrea Resources Corp is engaged in the acquisition, exploration and development of mineral properties located in North America.

Private Markets

Quants Inc

Quants, Inc, a California Corporation, develops, markets and operates financial technology platforms and alternative investment products offering sophisticated risk management since 2010. The Company has primarily sharpened its focus with…

Almond Smart Home Router by Securifi

Securifi sells user friendly touch screen routers that also have support for IoT/home automation.Securifi’s Almond revolutionized wireless router setup with its easy to use Touchscreen Interface in 2012. Now our…