Four U.S. copper fabricators and an international copper merchant have banded together and hired a law firm to oppose J.P. Morgan and BlackRock in their plans to launch the first ETFs backed by physical copper in the U.S. They fear the two ETFs will take copper, demand for which currently exceeds supply, off the market, leading to shortages and higher prices for industrial users. Basically, they fear hoarding.
Interestingly, though, they’re not fighting the third contender — ETF Securities of London — which has filed with the SEC for a full suite of seven physical industrial metal ETFs, including copper. The lawyer for the group says there’s a significant difference in how ETF Securities plans on managing its copper stocks, if it gets SEC approval.
The group has already managed to throw one wrench into the works. The proposal of NYSE Arca (formerly Archipelago) to list and trade shares in J.P. Morgan’s JPM XF Physical Copper ETF hit the 90-day mark on July 19, and rather than granting or denying approval, the SEC instituted a round-two proceeding seeking more comments. There’s already been a significant back-and-forth between the copper group’s attorney, Robert Bernstein of Vandenberg & Feliu in New York City, who filed two SEC comment letters, and NYSE Arca, which filed its own comment letter in response to his first letter. ....
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