A law firm that represents major copper producers and traders has sent a letter to the Securities and Exchange Commission opposing a physically-backed copper ETF proposed by JP Morgan (NYSE: JPM).

Vandenberg & Feliu LLP said the planned JP Morgan ETF would be backed by physical copper that must meet the London Metal Exchange requirements for copper available for immediate delivery.

“JMP’s offering initially calls for the immediate removal from the market of as much as 61,800 metric tons of such copper, or the withdrawal of more than 30% of the copper available for immediate delivery worldwide,” the letter said. “JPM’s offering will therefore result in a substantial artificially-induced rise in near-term copper prices on the LME, which will severely disrupt the world market for the trading of such copper by, among other things, simulating the effects of an artificial squeeze or corner being financed by unsuspecting investors in JPM’s ETF.”

The lawyers represent Southwire, one of the largest copper users in the United States, and Red Kite, a major metals hedge fund and physical trader, according to a Reuters report.

They argued the JP Morgan ETF would artificially boost copper prices.

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