The likelihood that JP Morgan or BlackRock will launch their controversial copper exchange-traded funds (ETFs) is fading rapidly, amid intense scrutiny of bank activities in physical commodity markets.
Last week JP Morgan announced that it was exploring opportunities to divest its physical commodities assets, which includes a warehousing business that will be critical to the performance of the ETF. Around the same time, Goldman Sachs confirmed that Metro will not act as the warehouse custodian servicing BlackRock’s iShares ETF, potentially derailing the asset manager’s plans to launch its own physical copper fund. The Securities and Exchange Commission (SEC) approved the funds late last year, despite intense opposition from physical consumers of copper, who charged that the products would inflate prices and crimp availability in the physical market. In their original filings with the SEC in 2010, JP Morgan announced initial plans to buy 61,800 tonnes of copper to support its ETF, while BlackRock planned to launch a 121,200-tonne fund....MORE
