COPX ETF

In recent days, copper prices rallied hard on the back of Bank of China stimulus news. The current case for copper is much stronger than that for many other industrial metals. In spite of the stimulus plan, substantial macro risk still overhangs the market.

Copper prices surged earlier in the year, but have since reversed gains as China's copper inventories slipped from extreme highs. Rising copper mining costs may offset post-2020 gains in copper, depending on economic and political risk in Latin America. China's efforts to bolster copper stockpiles may have pulled future demand forward, potentially leading to a sharp decline in imports later this year.

Global X Copper Miners ETF has underperformed the copper price and the majority of mining companies. Increased electrification is driving copper demand, but China's real estate decline hinders overall demand. Copper mining companies do not appear to be good earnings compounders, given the volatile cash flow nature.

Global X Copper Miners ETF (COPX) has delivered substantial returns for investors, rising 15.33% since my previous article last September. COPX is strategically positioned to benefit from the anticipated demand-supply imbalance for copper, driven by surging demand for electrification. With soaring demand and limited supply, copper prices are expected to rise, making COPX a solid choice for investors seeking exposure to copper.

Copper Miners ETF owns a collection of 40 copper-related miners. The exchange-traded fund has a fairly high 0.65% expense ratio, likely because of foreign holdings.

There has been a rally in the metal and mining space. Be it silver, gold, copper, or uranium -- all mining stocks and ETFs have been hovering around their 52-week highs.

The world is heading towards a copper shortage that could last for a few years, which could hinder efforts to achieve zero carbon emissions and increase industrial expenses. Due to the current high interest rates, there is reluctance to invest in new copper mines. Instead, major producers are focusing on acquiring existing mines to expand their copper reserves rapidly. There is a possibility of copper prices rising significantly, possibly reaching $6.50/pound, representing a potential 38% increase from current levels.

Investors looking for momentum may be interested in the GX Copper Miners ETF COPX, which recently reached a 52-week high and has increased by 47.89% from its low of $31.65/share.

Wall Street offered decent returns in March. Marijuana, mining and cryptocurrency were the real winners in the month while some other spaces also rallied hard.