Copper ETP Market Value Triples as Investors Bet on Recovery

The market value of the only physical copper-backed exchange-traded product nearly tripled in a month as JPMorgan Chase & Co. gets ready to start its own fund for the metal in the U.S.

The value of assets held in ETF Securities’ physical exchange-traded copper fund rose to $48.8 million today from $16.4 million a month earlier, according to data on Bloomberg. A total of 6,012.605 metric tons of copper were held as of Feb. 1, compared with 2,122.631 tons on Jan. 3.

“Many investors look at copper as one of the better ways to play the global industrial cycle,” Nicholas Brooks, the head of research and investment strategy at ETF Securities, said by phone in London today. “With the U.S. economy showing clear signs of recovery, and China also showing signs of recovery now many investors are looking at copper as a key beneficiary of this.”

ETF Securities started the world’s first exchange-traded products backed by copper, nickel and tin in December 2010. JPMorgan won regulatory approval last month for the first U.S. exchange-traded fund backed by physical copper. The Securities & Exchange Commission is scheduled to make a decision on BlackRock Inc. (BLK)’s proposed copper ETF on Feb. 22.

“Last week we saw very strong inflows again into the broad industrial metals and copper,” Brooks said. “This trend appears to be continuing. The data has been improving since the third quarter of last year for both U.S. and China.”

Copper for three-month delivery is up 4.7 percent this year on the London Metal Exchange. The metal used in pipes and wires climbed to a four-month-high of $8,346 a ton today.

To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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