Expectations for a recovery in the manufacturing industry … Interest in “red gold” copper

Admission 2020.11.17 06:00

Despite concerns over the re-proliferation of the new coronavirus infection (Corona 19), interest in commodity investments draws on the expectation that the economy will normalize at a rapid pace. In particular, copper is expected to show solid growth in the future as demand from China picks up.

The easiest way for individual investors to invest in commodities is through indirect investment through funds. There are two types of commodity funds: equity funds that invest in commodity-related companies, commodity derivative funds that track current and future commodity indices, and ETFs.

ETFs linked to copper futures prices include Samsung KODEX copper futures and TIGER real copper products linked to LME’s calculated spot price of copper. KBSTAR Palladium Futures is an ETF linked to the recent monthly price of palladium futures. Individual copper-related stocks are LS (006260), Poongsan (103140), Seowon (021050)You can also put your back to it.

Copper prices have been rising recently. The price of copper, commonly referred to as “ Dr. Copper ”, is rising again after hitting a low at the end of last month, as the real economy can be examined in advance. On the 13th (local time), the spot price of copper on the London Metals Exchange (LME) was $ 6926 per ton (ton), up 33.3% from the March low ($ 4617).

The financial investment industry has predicted that demand for industrial metals such as copper will gradually expand as the crown-disrupted global economy gradually recovers in the future. Copper moves closely with the economy as it is widely used in sectors such as construction, equipment, infrastructure and transportation.

The recovery of the manufacturing industry continues amidst sporadic worries about the proliferation of the crown around the world. The PMI (Manufacturing Purchasing Management Index) of the United States and the Eurozone was higher than that of the previous year. Despite the partial blockade of the Eurozone, the index recorded 54.4, far exceeding the previous estimate (53).

Kim Ye-in, a researcher at Korea Investment & Securities, said: “As quarantine measures are implemented with a view to the coexistence of the virus and the economy, not the virus, the impact of the corona on the manufacturing industry is limited. explained.

China, which accounts for half of the demand for copper, is expected to continue its growth next year. On the 12th, the International Economic Policy Institute (KIEP), a national research institute specializing in international economics, predicted that China will record 8.4% growth next year, up 6.2 percentage points (P) compared to this year’s forecast (2.2%).

Gyu-yeon Jeon, a researcher at Hana Financial Investment, said: “When the Chinese government came up with a dual circulation strategy, the role of the domestic market became important.” Meanwhile, demand from other countries will improve together. “

The political direction of the governments of the major countries has also been interpreted to support the demand for copper. This year, if governments have increased their fiscal spending in the form of relocation expenses to preserve the income of the most vulnerable, this means that next year, spending with high tax multipliers will take priority to drive economic growth. Representatively, there are investments in infrastructure.

The acceleration of eco-friendly policies promoted by US President-elect Joe Biden is also a boon to the commodity market. Copper can be used in the production of electric vehicles, solar panels, wind power generation, and lithium-ion batteries. Palladium, a byproduct of the copper and nickel smelting process, is used in exhaust gas reduction systems for cars and ships.