JPMorgan Chase plans Copper ETF - worldwide interests shiver with fear

Its regulatory filings suggest its ETF could hold 61,800 tonnes, 27 per cent of the copper held in the London Metal Exchange’s global network of warehouses. An ETF proposed by BlackRock iShares could hold 121,200 tonnes.

 

Groups complaining about the ETF include Southwire, the biggest US manufacturer of electrical cable, and Red Kite, a metals-focused hedge fund and trader. Bob Bernstein of Vandenberg & Feliu, a law firm acting on behalf of the consumers, said he was representing companies that account for half of US copper fabrication capacity. In the letter to the SEC, they argue the ETF would result in a “substantial artificially induced rise in near-term copper prices ... simulating the effects of an artificial squeeze or corner being financed by unsuspecting investors in JPM’s ETF.”

 

Similar products in precious metals, such as gold, silver and palladium, have been very successful in recent years. But copper consumers fear that allowing investors to hoard physical industrial metals would create shortages and drive up prices.