It is need less to discuss the impact of this metal on any world economy with its extensive usage in Auto and Power Distribution Sectors; both vital industries will cease to exist without healthy supply of the mineral. The growth driver that it is, Copper is once again drawing limelight among commodity investments as most analysts are betting on a major supply shortage in the current year. The Chinese surge in terms of middle class population and housing demand are the biggest indicators to an upcoming Copper rally that primarily begun roughly around 2001.
An interesting approach to this asset would be the blue chip stocks among global Copper mining companies which are poised to outperform the returns of the physical metal markets in case of an positive outbreak. The rally shows a good support case owing to the Sino Copper Demand which accounts for 46% of the global consumption of Copper and if metal analysts at Barclays are to be believed, China's domestic demand in 2013 will exceed the indigenous production leaving a supply deficit of at least 2.2 million tons of Copper.
Interestingly enough, an inverse logic may also be applied here to tap on the emerging economies like China and India through Copper Miners ETFs and various index attuned Copper funds that will diversify your portfolio with as much as thirty top companies of the world engaged in production, mining and exploration of the metal. A sound logic as bulk of the worldwide demand will come from the emerging nations trade blocs like the BRIC and ASEAN to whom Copper is prime due the aggressive urbanisation they are experiencing.
Copper as a commodity has great amount of worldwide demand but the same can't be said for the declining supplies of the metal.
A big list of practical uses (needed in auto parts, wiring and plumbing etc.) makes it certainly the most useful industrial metal and restricted usages and traits like volatility associated with gold make it lag behind in the choice grade of traders looking for a metal that has more to it than just volatility in price and speculation. A rise in spot prices could very well be indicative of a growing economy. Globally Construction is one sector that utilises the metal in a big way.Chile and China are the top producers of this metal and the former owns 20% of world reserves. The next producer in line is Peru and the United States.
Exchange trade products have taken an asset class that was hard to gain exposure to and put it in front of investors in a simplified package unlike before. There are futures contracts, also physically backed products (bullion), stocks (focussing on mining, exploration and refining companies and tend to be influenced by the broad and complete market conditions) and equity traded funds (ETFS) for interested individuals wanting to gain exposure to Copper Miner stocks. A portfolio with exposure to a commodity will insure lowering of risks. It helps to hedge inflation and provides enough scope for liquidity of position.
Currently China seems to consume little less than half of world copper, thereby possibly creating a scarcity of the metal globally. This indeed will lead to escalation in this commodity's prices; Right now roughly trading at $3.50 per pound.
The global boost in the intake of Copper is already in an irreversible upswing and it is the wise who will vest with the Copper ETF while the prices are still reasonable when factored with the lowering global productions and scarce new ore finds.
HOW A $17,537 CASH INVESTMENT BECAME A $4 MILLION PROPERTY GENERATING A YEARLY NET INCOME OF $315,000!
(AND THE STEP-BY-STEP DETAILS OF OTHER OUTRAGEOUSLY PROFITABLE REAL-LIFE PROPERTY DEALS)
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