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Copper
ASX welcomes its first Copper Miners ETF
By
Kerry Sun
Wed 23 Nov 22, 2:57pm (AEST)
Source: iStock
Key Points
- ETF provider Global X has launched the Global X Copper Miners ETF
- The ticker is WIRE and invests in a range of global copper oriented miners
- The ETF pays a semi-annual divided and currently trades around the $10.00 a share
Wednesday welcomes the Global X Copper Miners ETF (ASX: WIRE) to the ASX, the first of its kind for local investors.
WIRE provides investors access to a 'global basket of copper miners' which stand to benefit from the electrification megatrend.
WIRE pays a semi-annual dividend, pending more details about the payout. The ETF is currently trading around the $10.00 mark.
Copper 101
Copper prices are often viewed as a barometer of global economic activity, given its acute sensitive to the ebb and flow of industrial demand. As the global economy slows, copper prices tend to follow.
Copper consumption is dominated for its industrial applications across equipment, building construction and infrastructure. Those three segments account for approximately two thirds of global copper consumption.
According to Global X, almost one third of global copper mine production comes from Chile, while 41% of refined copper production occurs in China.
Copper prices are down -18.4% year-to-date amid a slowdown in global industrial activity and rising interest rates.
Copper price 1989-2022 (Source: TradingView)
"Over the longer term, the global energy transition is set to bolster the demand for copper, due to its relatively heavy use in renewable energy technologies, battery storage and electric vehicles," said the Australian Government's commodity forecaster, the Office of the Chief Economist.
Despite medium to long-term supply concerns, copper prices remain anchored to the underlying trends in global industrial activity. Could this change and the metal begins to get priced as a 'critical metal'?
Top exposures
WIRE currently holds 40 companies, most of which are based in Canada (32.5%), Australia (13.1%) and China (7.8%).
Its top 10 holdings as a percentage of net assets include:
Company | Weighting | Activities |
|---|---|---|
First Quantum | 5.21% | Canadian copper company, ranks as the world's eighth largest copper player, according to Kitco |
Freeport McMoran | 5.13% | World's largest producer of molybdenum and major copper producer, based in the US |
Antofagasta PLC | 5.05% | Chilean multinational mining co, ranks as the tenth largest copper player |
Zijin Mining | 4.97% | China-based mining multinational engaged in exploration and development of copper, gold, zinc and battery metals |
Ivanhoe Mines | 4.95% | Canadian mining company advancing three critical metals projects in Southern Africa |
Southern Copper | 4.92% | Integrated copper producer based in Mexico |
Grupo Mexico | 4.82% | Mexican conglomerate that operates mining, transportation and infrastructure |
KGHM | 4.72% | Polish multinational whose a major copper and silver producer |
BHP Group | 4.72% | No explanation needed |
Lundin Mining Co | 4.67% | Global base metal miner based in Canada |
As of 22 Nov (Source: Global X | Table: Market Index)
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