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In an effort to overturn a decision by the US SEC to approve JP Morgan's plan for a physically-backed copper ETF, US-based wire and cable makers Southwire Co. and Encore Wire have taken their case to the Federal Appeals Court. The two companies argue that the ETF will cause "an investor-financed squeeze" in the copper market and would lead to a shortage of material for immediate delivery. The JP Morgan ETF will be indicative of the fortunes of another, larger, ETF which Blackrock hope to launch. A ruling by the SEC on this ETF was delayed in late December and is now due on 22nd February.

The SEC has postponed its decision on whether to allow Blackrock to launch a physically backed ETF for two months. The move, which comes just a week after the SEC approved JP Morgan's request for a similar ETF, sees the final decision put off until 22nd February. Copper fabricators are highly opposed to physically-backed copper ETF's saying that such investment vehicles would have a "devastating" effect on the market. The Blackrock ETF, which is expected to be twice the size of the JP Morgan ETF, will hold up to 121,200t of copper cathode as a guarantee against shares in its fund.

US-based asset manager Blackrock Inc has gained approval from the SEC for its proposed physically-backed copper ETF. A decision on the controversial ETF, which copper consumers argue will disrupt supply in the copper market and bid up prices, was originally due in December. Although the planned ETF has received approval from the SEC, it is likely that it will face legal challenges similar to those faced by JP Morgan. In an effort to overturn a decision by the US SEC to approve JP Morgan's plan for a physically-backed copper ETF, US-based wire and cable makers Southwire and Encore Wire have taken their case to the Federal Appeals Court.

The Securities and Exchange Commission has approved JPMorgan Chase & Co's plan to launch a physically backed exchange-traded fund for copper in the US. Major end users of copper, including Southwire, Encore Wire, Luvata and AmRod have vigorously opposed the launch of the physically backed ETF. The consumers argue that the removal of 183,000t of copper from the market, 27% of current LME inventories, would have a "devastating" effect on the market by creating tightness in supply. US senator Carl Levin, who is also opposed to the launch of the fund, said that the ETF will "increase copper prices and volatility, and undermine market efforts to produce prices in response to supply and demand by copper users".

Physical copper consumers, including AmRod Corp., Southwire Co and Encore Wire Corp are setting the stage for another confrontation with the SEC over the controversial approval of JP Morgan's physically-backed copper ETF. In an open letter to the SEC from the group's lawyers, they reiterated claims that the ETF would leave less copper in the market for manufacturers, creating shortages and boosting prices. The group branded the decision from the SEC as "not based on substantial evidence" and "arbitrary and capricious." The consumers also said it was surprising that senior SEC executives met with JP Morgan's head of commodities days before the SEC announced their decision, whilst refusing to meet with representatives of the copper consumers. According to a report from the Financial Times, it is now thought likely that the group of consumers will appeal the SEC decision.

LONDON, Aug 11 (Reuters) - Copper prices slid to six-month lows on Monday as a strengthening dollar triggered a sell-off ina market already worrying about weak demand from top consumers China and the United States. Copper for delivery in three months MCU3 hit $7,315 a tonne on the London Metal Exchange, the lowest since early February, before closing at $7,330 down from Friday's $7,410. "The correction that we are seeing is really a reflection ofthe slowdown of the global economy," said Ashok Shah, chief investment officer at London & Capital. He said weakness in industrial production would continue to weigh on metals as demand was seen slowing and as more investors unwound long positions. "I would expect some more speculative money to be exiting."