Copper prices have been on an uptrend for quite some time and is currently trading at a 10-year high level. The rally looks to be more protracting as supply crunch in top producer Chile has been boosting the price. A notable improvement in global demand is also in the cards. Plus, a global push for green investments is also benefiting the demand for copper.

Market watchers are of the view that the industrial metal is about to top its all-time highs set in February 2011. According to a survey from Bloomberg published last week, investors expect copper to be the best performing metal in 2021, as quoted on Kitco.

Let’s delve a little deeper.

Supply Crunch

The latest supply disturbance hit the copper market after Chilean port workers called for a strike action in response to President Sebastian Piner's move to resist a bill that would have permitted workers to make a third round of early withdrawals from their pension funds.

“A potential Chilean port strike is a substantial risk given already-tight concentrate markets. In this context, even a modest disruption could have an outsized impact on prices," said Bart Melek, head of commodity strategy at TDS, as quoted on Kitco.

China’s Economic Recovery

China matters the most for this metal as the country is the world’s biggest consumer of this industrial metal, making up roughly 40% of the global copper demand. China's economy grew by double digits in the last quarter and made the journey of copper extremely easy.

Expectations for Economic Revival

Copper – a key industrial metal – is often used as a gauge for global economic health. In February, the Wall Street analysts upped their forecasts for U.S. growth in 2021 to 6.8%, while the International Monetary Fund projected U.S. growth at 6.4%.Goldman Sachs recently boosted its growth forecast for the U.K. economy to a staggering 7.8% for 2021. IMF upped global growth forecast to 6%, an increase from its January upgrade to 5.5% from the prior 5.2%. All such upbeat forecasts make the case for copper investing strong.

Global Push for Clean Energy

Copper is used in electric vehicles and renewable energy productions. Emerging trends for making the world carbon-free, President Biden’s intention to boost clean energy in the United States as opposed to erstwhile President Trump, Europe and China’s keen efforts to spread clean energy over the long run are good for copper demand.

Surging copper prices are also providing a boost to miners, driving up stock prices and raising the prospect of more blockbuster returns to shareholders (read: Industrial Metal ETFs Rallying Hard).

Amid the bullish backdrop, copper ETFs appear to be up for gains.

ETFs in Focus

Global X Copper Miners ETF (COPX Quick QuoteCOPX - Free Report) ) – Up 33.8% YTD

This ETF offers global access to a broad range of copper mining companies. It tracks the Solactive Global Copper Miners Total Return Index and holds 30 stocks in its basket. The fund charges 65 bps in fees.

United States Copper Index Fund (CPER Quick QuoteCPER - Free Report) ) – Up 22.9% YTD

This fund seeks to track the performance of the SummerHaven Copper Index Total Return, plus interest income from CPER’s holdings. The index provides investors exposure to front-month copper futures contract traded on the NYSE Arca. The fund charges 76 bps in fees.

iPath Bloomberg Copper Subindex Total Return ETN ) – Up 22.8% YTD

This ETN tracks the Bloomberg Copper Subindex Total Return, which seeks to deliver returns through an unleveraged investment in the futures contracts on copper. The index currently consists of one futures contract on the commodity of copper (currently the Copper High Grade futures contract traded on the COMEX). The product charges 45 bps in fees.

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