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China is driving Copper higher

SCCO, FCX, JJC, COPX

The data over the weekend showed China’s November industrial production gains of 10.1%, which is the highest reading since March. Higher production and higher Copper demand are good leading indicators.

Copper futures are tapping the highest prices in 7 wks, with Comex March futures prices up 1.4% at over $3.71 lb.

If China has about 40% of global Copper demand, then higher industrial production would drive up demand yes.. The other good news out of China was that its consumer prices rose only 2% in November, meaning that inflation is in check.

It is somewhat interesting that Southern Copper Corp. NYSE:SCCO is not responding much more positively, perhaps because shares rose from 36 last week to 38.25 Monday.

Freeport-McMoRan Copper & Gold Inc. NYSE: FCX, is still suffering analyst downgrades after last week’s unpopular acquisition, is off another 0.4% at 31.60 today, its share price is not going to react just to metals prices only in here IMO.

There are gains in the iPath DJ-UBS Copper TR Sub-Idx ETN (NYSEArca: JJC), as the Key exchange-traded product that tracks Copper, with a gain of 1.3% to 46.83, against a 52-week trading range of 21.61 to 51.41.

An ETF that tracks Copper miners is the Global X Copper Miners ETF (NYSEArca: COPX), it is a penny at 12.95, against a 52-wk trading range of 10.30 to 15.82.

China will likely stimulate its economy further, and with its low inflation rates Copper demand should grow in the immediate future. Stay tuned…

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