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Could Copper ETFs Outshine Gold ETFs in 2011?

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Copper is at a record high of $9,357.75 a metric ton today, up 1.5% for the session--and up 27% YTD.

PortWorldNews, a shipping trade publication, reports that "An accident over the weekend at Chilean copper mine Dona Ines de Collahuasi's Patache port has halted operations" after three contract workers were killed "when part of a ship-loader collapsed."

Dona Ines de Collahuasi, a joint venture of Anglo American Plc and Xstrata Plc--and the world’s third-largest copper mine--has declared force majeure, and will not ship copper "until further notice."

By all accounts, this is expected to further tighten supplies at a time when global stockpiles are dwindling. BMO Capital Markets is projecting the 2011 copper deficit to be approximately 380,000 metric tons, Standard Bank predicts a 385,000 metric ton deficit, and BNP Paribas expects the number to be closer to 500,000.

As such, London's Commodity Online expects that "copper ETFs are all set to compete with Gold ETFs in the commodities world."

Right now, listed copper ETFs include First Trust ISE Global Copper (NASDAQ: CU), Global X Copper Miners ETF (NYSEArca: COPX), and iPath DJ-UBS Copper (NYSEArca: JJC). Commodity Online further notes that "JP Morgan has already filed with the SEC an application for a physically backed ETF which, if fully taken up, would result in a holding of 61,800 tonnes of metal stored in the bank's Henry Bath warehouses."

Copper's got quite the potential for investors as we head into the new year. If prices continue to soar, you may also want to reconsider that major bathroom renovation you've been talking about for so long...
POSITION:  No positions in stocks mentioned.