Analysts do not expect the funds to have a large impact on the copper market as initial purchases could be initially slow.
“It is paving ground for (an) artificial spike in copper prices once the proper macro backdrop is in place,” Dominic Schnider, an analyst at UBS Wealth Management, said in the article. “But right now we are only looking at copper strength related to the cyclical uptick in demand, and I am not sure if that will be enough to motivate investors.”
Moreover, the BlackRock copper ETF could hold up to 121,000 tonnes of copper guaranteed against its shares, and the JPMorgan fund could store about 62,000 tonnes. In comparison, the global market for refined copper is expected to hit a 281,000 tonne surplus for 2013 due to growing supply against low demand, according to the International Wrought Copper Council.
For more information on copper, visit our copper category.
Max Chen contributed to this article.