UPDATE 2-BlackRock enters copper ETP race with SEC filing

* BlackRock iShares Copper Trust to track LME copper price

* Each share expected to represent 10 kilograms of copper

* Copper ETPs seen attracting new investment demand
(Recasts, adds detail, analyst comments and London copper

By Chris Kelly

NEW YORK, Oct 26 (BestGrowthStock) – BlackRock Asset Management
(BLK.N: ) has joined the race to provide an exchange-traded
copper product to institutional and retail investors, filing
its own offering with the U.S. Securities and Exchange
Commission on Tuesday.

After months of speculation and discussion in the base
metals complex, three firms have now stepped forward in the
past month to launch their own copper-based products.
[ID:nLDE69A0I5] [ID:nLDE69O174]

Analysts say these products could help drive copper prices
higher by attracting new investors, many of whom, until now,
have had few opportunities to invest directly in the metal,
which is used in construction and electrical applications.

“I think it does enable pension funds and retail investors
to get in on physical metal investment,” said Justin Lennon, a
metals analyst with Mitsui Bussan Commodities (U.S.A.) Inc.

Unlike JPMorgan’s (JPM.N: ) product, which will look to
acquire physical copper, BlackRock’s iShares Copper Trust plans
to track the London Metal Exchange cash copper price, with each
share expected to represent 10 kilograms of copper, the filing

(Full SEC filing: http://link.reuters.com/gew32q )

LME (CMCU3: ) copper for three-month delivery rose to $8,554
per tonne on Tuesday, its highest since July 2008.

At the London Metal Exchange’s annual dinner two weeks ago,
the exchange’s chief executive, Martin Abbott, said large
physical base metals positions held by ETPs could be subject to
the exchange’s lending guidelines. [ID:nLDE69C0ID]

While providers have for several years run successful
products in the precious metals and energy markets, they have
been slow to enter the fray of the base metals industry due to
the relatively high cost of storing the metal and tighter bank
lending standards in the aftermath of the financial crisis.

“Before the recession, banks were much more willing to
finance production, whereas now lending standards have
tightened,” Mitsui’s Lennon said. “Perhaps this is a method for
producers to finance their own production.”
(Editing by Dale Hudson)

UPDATE 2-BlackRock enters copper ETP race with SEC filing