U.S. president Donald Trump noted that a 25% levy on copper imports could be on the way. This is a boon for copper prices, which, in turn, have been responding bullishly.
U.S. manufacturers have been stocking up on copper ahead of potential tariffs, leading to increased demand. President Trump said that the Commerce Department will be investigating the impact of copper imports, particularly with regard to national security. The concern is that China is looking to dominate the global copper market, leading to the probe of imports. Of course, all of this is only helping to support the bullish case for copper.
The rise in copper prices has been evident in related indexes, namely the S&P GSCI Copper as well as the Bloomberg Copper Subindex. Both have risen over 10% this year thus far.
Accompanying the rise of those indexes is also increasing futures prices on the trading floor of New York. Tariffs are essentially being priced into futures as traders become more bullish on the notion that more tariffs are to come.
“A 25% tariff was clearly not what the market was expecting before those comments, and now traders are scrambling to price in the correct level, whatever that might end up being,” said Ole Hansen, head of commodity strategy at Saxo Bank AS. “The disruption to global trade flows is very real.”
While the aforementioned geopolitical forces are driving copper, there are also strong fundamentals in place. Namely, the long-term trend of of the U.S. leaning heavier on electricity for energy needs. All said, it’s an ideal time for copper exposure.
2 Copper Mining Options
Given the strong momentum behind copper, this opens the door for exposure to copper miners. In this case, Sprott has two funds that are worth considering.
One of those is the Sprott Copper Miners ETF (COPP ). The fund specifically tracks the Nasdaq Sprott Copper Miners Index (NSCOPP). The index includes producers, developers, and explorers that support the copper mining industry. For diversification, COPP provides blanket exposure by focusing on large-, mid-, and small-cap mining companies.
For the risk averse, small-cap and microcap companies can offer investors higher potential for growth. Midcap companies can offer a mix of large-cap characteristics with a tinge of growth from small-cap equities. This market cap characteristics in the copper mining industry can be combined into one fund via the Sprott Junior Copper Miners ETF (COPJ ). The fund aims to track the total return performance of the Nasdaq Sprott Junior Copper Miners Index. The index incorporates mid-, small-, and microcap companies entrenched in copper-mining-related businesses, offering exposure to equities with high growth potential.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
Disclosure Information
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Neither URNM nor URNJ are invested in any portion of AWS, Microsoft, or Meta.
Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM SGDJ
