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SEC approves BlackRock copper ETF
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Friday, 01 Mar 2013

BNamericas reported that the US Securities and Exchange Commission has approved investment firm BlackRock's copper exchange traded fund the iShares Copper Trust.

Mr Leon Westgate analyst of Standard Bank said that “The BlackRock ETF can hold up to 120,000 tonnes of copper which is around double the tonnage that can be held by JP Morgan's version. This opens up some interesting implictions for premia and spreads should it successfully launch.”

Mr Westgate said that copper on warrant stocks are up 134,500 tonnes so far this year and increased another 6,350 tonnes with long exit queues which has put the copper market in a situation analogous to an ETF.

He said that ultimately the real stress from this situation will likely only be felt if/when the copper market starts to tighten up. The key will be how popular these ETF vehicles will prove to be in terms of exacerbating the present situation, absorbing the current surplus then drip-feeding it back.

In early February, copper fabricators in the US who fear that ETF funds will promote speculation and could artificially inflate the price of copper by distorting the supply chain, filed an appeal asking the US court of appeals in Washington DC to review the approval of JP Morgan's ETF, the JPM XF Physical Copper Trust.

Source - Business News


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