Copper ETFs strengthened today after the metal surged to an all-time high driven by Chinese demand.
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Crucial Sector Surge
The industrial metal shot 1.3% higher to $11,771 a ton after China said it would stick with a “more proactive” fiscal approach and maintain a “moderately loose” monetary stance for the world’s second-largest economy.
In short, that means China will continue to spend to help build its economy in a number of crucial sectors.
“The Politburo readouts present a more proactive macro environment than investors have expected,” said Xu Wanqiu, an analyst with Chinese brokerage Cofco Futures Co. “Copper will benefit from policy support toward power-grid upgrades, computing power. The momentum remains very bullish.”
Trade data from China was also supportive for copper, with exports rebounding last month to beat estimates and push the country’s trade surplus past $1 trillion for the first time in any year.
It boosted the Global X Copper Miners ETF (COPX), the iShares Copper (ICOP) and Metals Mining ETF and the Sprott Copper Miners ETF (COPP).
Supply and Demand
In the year-to-date the COPX is up nearly 80% – see below – the ICOP is up 66% and the COPP is up 56%. Indeed, a number of commodity ETFs including gold and silver have also performed well.
Copper, crucial to energy transition technologies and products such as electric vehicles and AI-powered data centers, has gained more than 30% on the London Metal Exchange this year. It has been helped by a supply-demand imbalance with smelting capacity growing faster than mining capacity. A series of mine outages has added to the squeeze.
A further supply barrier looms in 2026 with concerns that President Donald Trump will impose tariffs on the metal.
Global supply of refined copper could see a shortfall of 450,000 tons in 2026, partly due to this stockpiling in America, analysts from Chinese brokerage Citic Securities Co have predicted.
Demand is expected to keep rocketing with BloombergNEF declaring that it is going to rise to about 50 million tonnes from 30 million tonnes in the next 25 years.
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