The analysis from the SEC’s Division of Risk, Strategy, and Financial Innovation also found that there is not a strong statistical relationship between copper inventories and copper prices, according to the filing.
Reports last month said the SEC had pushed back the deadline for a ruling on JP Morgan’s planned copper ETF, citing more time needed to go over the consequences of a physically-backed copper fund on metal flow and prices. [SEC Holds Off on Physically Backed Copper ETFs]
End users of copper are afraid ETFs backed by physical metal would boost prices and lead to supply shortages. [Physically-Backed Copper ETFs Still Waiting in the Wings]
“It’s difficult to imagine how the SEC economists could conclude that removing as much as 180,000 metric tons of copper from LME warehouses holding a little more than 200,000 tons globally will have no impact,” said Robert Bernstein, a lawyer at New York-based Vandenberg & Feliu, in a Bloomberg News report. He represents a group of industrial copper consumers.