On the backdrop of tightening supply in the copper market and uncertain outlook from a potential Eurozone recession and slowdown in China, JP Morgan (NYSE: JPM) is moving closer to listing what could be the first physically-backed copper exchange traded fund.
According to a Securities and Exchange Commission filing, the JPM XF Physical Copper Trust will try to reflect the performance of Physical Copper Grade A.
In its original filing in October 2010, JP Morgan stated that it would store up to 61,800 tonnes of copper based on a price of $8,8086.75 per ton, report Melanie Burton and Chris Kelly for Reuters. The filing states that the physical copper will be stored in any of the globally located Henry Bath Group warehouses.
According to a NYSE spokesperson, the J.P. Morgan copper ETF could come to market as early as June this year.
JP Morgan, BlackRock and ETF Securities initially filed for copper-backed ETFs in late 2010, which helped lift copper prices above $10,000 a ton in February 2011. However, copper prices have declined as the demand from the physically-backed ETFs never materialized.
Copper prices remain steady above $8,000 a ton Tuesday, coming off a three-month low Monday, according to another Reuters report. Copper prices are up around 5% year-to-date. [Copper ETF Decline Signals Global Growth Jitters]