Tags: JPMorgan Plans Copper Exchange-Traded Fund

JPMorgan Plans Copper Exchange-Traded Fund

Monday, 25 Oct 2010 08:11 AM

JPMorgan Commodity ETF Services registered to launch an exchange-traded product (ETP) for copper in a filing late last week with U.S. regulator the Securities and Exchange Commission.

Any start date is dependent on approval from U.S. regulators, but the filing said that transporting and storing the metal would be dealt with by the bank's warehousing unit, Henry Bath Group.

The filing added that the bank is looking to secure copper valued at $499,761,150, which is equivalent to around 61,800 tons, based on a copper price of $8,086.75 a ton.

One share is equal to one hundredth of a ton, the filing added.

A spokesman for JPMorgan declined to comment.

Earlier this month, UK-based ETF Securities said it would launch ETPs for base metals, while producer RUSAL said its aluminum-supplied ETF would hit the market within three months.

Talk that physically backed exchange-traded products (ETPs) in industrial metals are imminent has dominated base metals markets, generating speculation about their effect on prices and demand.

At the London Metal Exchange's annual dinner two weeks ago, the exchange's chief executive, Martin Abbott, said that large physical base metals positions held by ETPs could be subject to the exchange's lending guidelines.

"There is obviously an impetus out there for some participants to do it," Gayle Berry, analyst at Barclays Capital, said. "It is a huge talking point for the industry at the moment."

"A lot of people, producers and consumers, don't really know a lot about ETPs (and) don't understand how they function," she added.

At 6:39 a.m. EDT, benchmark copper for three-month delivery on the London Metal Exchange traded at $8,508 a ton, having earlier hit its highest since July 2008 at $8,549.

The red metal, used in power and construction, hit an all-time high at $8,940 a ton in July 2008.

Supply shortages have been a major factor behind the surge in copper prices due to a combination of falling ore grades in major producing nations, labor problems and project delays.

"Copper is probably the most well known of all the base metals, it's also the one with the most convincing fundamental story for higher prices, apart from possibly tin," Berry added.

"There is so much hype and discussion around it (ETPs), that actually, they may not turn out to be nearly as big an issue as the market is making out."

It took ETF Securities nine months to get approval for their U.S. platinum and palladium ETPs.

© 2017 Thomson/Reuters. All rights reserved.

 
1Like our page
2Share
StreetTalk
JPMorgan Commodity ETF Services registered to launch an exchange-traded product (ETP) for copper in a filing late last week with U.S. regulator the Securities and Exchange Commission. Any start date is dependent on approval from U.S. regulators, but the filing said that...
JPMorgan Plans Copper Exchange-Traded Fund
406
2010-11-25
Monday, 25 Oct 2010 08:11 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved