Long-Term Fundamentals Support Case for Copper

The case for getting copper exposure continues to grow as long-term fundamentals likely support continued growth. In a time when market uncertainty is abundant, having confidence in the growth trajectory of an asset is a welcome notion.Seemingly, tariff news continues to be a catalyst for copper markets with the metal making headlines. President Trump proposed 50% tariffs on copper imports, which could further spur a global race to build up copper inventories. In addition to tariffs are other factors adding to the bullish prospects for the element as outlined in a Sprott Copper Report.Heightened Demand Will Exacerbate Tight Supply“Copper has remained resilient due to strong fundamentals despite concerns over global trade, growth, inflation and China’s weaker economic performance,” noted Sprott ETF product manager Jacob White. Furthermore, as White noted, global inventories of the metal have fallen by 44% since February. This is in stark contrast to just over a year ago, when supplies were plentiful. “The physical tightness of the copper market is reflected by price resilience, record-low treatment charges (the fees smelters charge to process copper concentrate  into refined copper), premiums for immediate delivery (backwardation), rising Chinese copper premiums and rapidly declining inventories,” White confirmed. The simple solution might be to mine for and produce more copper. However, mining projects can be fraught with delays, further adding to the problem of meeting demand. “Compounding the issue is the growing complexity of bringing new copper production online,” White confirmed. “Delays to major mining projects are increasingly common, often tied to permitting, logistics or financing hurdles.” Figure 2. Copper Inventories Plummet (2015-2025)With the winds of momentum in its sails, it’s an ideal time for investors to consider getting copper exposure. Whether used as a portfolio diversifier or to add a growth component, getting exposure to the metal makes for an intriguing opportunity. The question now is whether to consider physical copper, or to use a backdoor play on copper’s strength via miners. What about getting both via the Sprott Copper Miners ETF (COPP)?Removing the GuessworkAs indicated in the aforementioned chart, the copper miners and spot prices have both been exhibiting strength. With upside in one feeding into the other, COPP’s recent inclusion of physical copper takes out the guesswork on how investors want to tailor their exposure. They can get both in the convenience of one ETF.For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Content Hub. 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. 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): GBUG, SLVR, SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP