Seismic Shifts In Commodity Markets Raise Sprott Copper Miners ETF’s Investment Profile – Sprott Copper Miners ETF (NASDAQ:COPP)

While the entire global economy has embraced the transformative potential of artificial intelligence, it’s the downwind effects of machine learning that may be of significant interest for the investment community. Sure, individual leaders in the technology space may grab the lion’s share of the attention. However, demand for the commodities required to feed the digital machinery has only accelerated, shining the spotlight on copper.

To be sure, when it comes to the metals, both gold and silver have captivated Wall Street thanks to their blistering, record-breaking rallies. Still, for those seeking holistic exposure to key resources, copper deserves closer inspection. The Copper Continuous Contract price is off to a solid start in 2026, having gained more than 4%. In the trailing year, this value has jumped over 38%.

Driving the case for copper is soaring electricity demand. According to an analysis by The Kobeissi Letter, global power demand may pop by 30% by 2035. Unsurprisingly, the primary catalyst for this surge will likely stem from data centers, whose share of total power use is expected to more than double from their current 1.5% allocation to 3.5% as AI adoption accelerates.

True, the biggest downwind beneficiaries regarding the AI power crunch will probably be energy specialists, particularly those who can supply reliable, large-scale power. However, other mission-critical sectors like the copper industry should see a significant ramp up in demand. What’s more, even with record grid spending, data center growth is outpacing the capabilities of U.S. energy infrastructure.

Put another way, rising demand for copper might not be a passing fad. Indeed, all evidence points toward a structural deficit for the critical industrial metal.

Just recently, S&P Global has warned that without additional mining and recycling efforts, the copper industry could face a deficit of over 10 million metric tons by 2040. If so, such a circumstance could result in nearly a quarter of projected demand remaining unmet. If that wasn’t urgent enough, the geopolitical element — especially an ambitious and assertive China — adds enormous pressure on the production ecosystem.

The Sprott ETF: Although copper easily ranks among the hottest assets on Wall Street right now, the commodity itself is not the easiest vehicle to invest in. Primarily, the status as a non-financial metal presents challenges, as copper is bulky, heavy and difficult to store. Furthermore, the futures market for copper is incredibly complex, designed for professional hedging as opposed to the buy-and-hold behavior common among gold investors.

As for the mining sector, while copper-related enterprises may offer opportunity, the sector also carries substantial risks. Furthermore, picking out individual copper miners over others requires intensive research — and many investors may simply not have the time and/or resources to dedicate for the purposes of enhancing copper acumen.

That’s where financial services specialist Sprott Inc. (NYSE:SII) enters the frame. Gaining a reputation for leadership in the precious metal and critical resource arenas, the company introduced the Sprott Copper Miners ETF (NASDAQ:COPP) in March 2024. Structured as a pure-play copper vehicle, the COPP exchange-traded fund aligns with the structural demand themes of the namesake commodity: electrification, AI, grids, defense and new energy transition.

In addition, the COPP ETF distinguishes itself through direct exposure to physical copper. With this framework, Sprott is able to reduce the fund’s tracking error relative to copper prices. Furthermore, the integration of the metal itself helps mitigate operational and geopolitical risks embedded within individual miners.

While COPP enhances the accessibility of a critical resource to a much wider audience, it’s also important to be aware of the underlying risks. Primarily, copper is economically sensitive. If global conditions falter for whatever reason, the copper market could see a sharp and sudden downturn. Furthermore, copper is thinly traded relative to other commodities, creating concerns related to volatility and non-ergodicity.

The COPP ETF: Even though the year is young, the COPP ETF has already gotten off to a strong start, gaining over 6%.

• From a technical perspective, the most conspicuous element is the robust price action, which stands well above the 50- and 200-day moving averages.
• What’s especially notable is COPP’s strong performance in December, where the bulls’ late charge forced a breakaway from an earlier consolidation pattern.
• Volume levels in the fourth (calendar) quarter have been noticeably elevated relative to prior months, reflecting accelerated interest in this sector.