The Securities and Exchange Commission gave the green light for the first physically backed copper exchange traded fund, but fabricators contend that the product would distort the metal’s supply.

The JPMorgan XF Physical Copper Trust will be the first ever U.S.-listed copper backed ETF, whereas current copper-related fund offerings track copper futures. The trust will hold 61,800 metric tons of copper stored in global warehouses, or the equivalent to 27% of copper held in the Lond Metal Exchange’s global network, writes Tony Daltorio for Money Morning.

However, a group of fabricators argue that the fund would “obviously drive up the price of copper available for immediate delivery and create shortages of such supply,” and remove as much as 30% of available copper for immediate delivery. [Physical Copper ETFs Face Pushback from Industry]

Senator Carl Levin, D-MI, also believes that the fund would be a “blow to American businesses and consumers” and “allow speculators to create a squeeze on the market.”

Nevertheless, the SEC says the ETF will track the copper price, not drive it, and allow investors to participate in the copper market. Similar copper ETFs in Europe have not disrupted the market overseas.

Moreover, the the proposed physically backed ETF’s 61,800 metric ton copper holdings is still miniscule compared to the 20 million tons of copper mined and used in 2012.