“Every institutional player in copper can buy copper, store it in an LME warehouse, or store it in a non-LME warehouse, and refuse to sell it to anybody else, no matter what happens to the price,” United States Commodity Funds’ CIO John Hyland said. “That is how that market works. That is how basically all commodities work. You just hold onto it if you want, except for the proposed physical copper ETF. [The fund] would be the only participant who cannot hoard copper.”
Moreover, Hyland even argues that a physical copper ETF would increase liquidity in the copper market as it would bring more investors to the table.
The SEC is reviewing the JPM ETF proposal until Feb. 22. Additionally, iShares is also working on a similar ETF that holds 121,000 tons of copper and ETF Securities is also planning a physical copper ETF this year as well.
For more information on copper, visit our copper category.
Max Chen contributed to this article.