ETF Base Metal** Dynamic Since October, JP Morgan, Goldman Sachs and other major international investment banks have purchased a large amount of copper, and industry insiders pointed out that this will inevitably push up the price of copper or trigger the next wave of financial bubbles.
According to foreign media reports, since October this year, three agencies have applied to the US Securities Exchange to launch the spot copper trading ETF**. JPMorgan's spot copper ** will receive support of 61,800 tons of physical copper; BlackRock's iShares Copper Trust will hold 121,200 tons of copper; ETF Securities will also establish a **, but did not specify how much t will be held copper. Another source said that Goldman Sachs and Deutsche Bank also intend to launch the spot copper ETF**.
According to reports, the spot copper ETF** is not just a paper contract, but it allows retail investors to invest in spot copper stored at the London Metal Exchange warehouse. This means that ETF transactions must be backed by physical copper, which will inevitably push up copper prices. Insiders pointed out that copper producers and buyers are very concerned about the actual user's inventory situation, if the current inventory is occupied by transactions such as ETF, producers will not be put into production, this phenomenon is very dangerous for the copper market, It can easily cause large fluctuations in prices.
The news that the international investment banks plan to launch the spot copper ETF** has brought the recent mysterious buyer's massive copper accumulation in the international copper market to surface. The trading record of the London Metal Exchange (LME) shows that a mysterious buyer bought more than $1.5 billion worth of copper on November 23, accounting for 50% to 80% of the stock's 350,000t, with a minimum of 17 More than ten thousand tons. The transaction immediately triggered market concerns about the shortage of copper supply. Spot copper prices were immediately pushed up to $8,700 per barrel, setting the highest price since the financial crisis in October 2008. The British "Daily Telegraph" broke the news on December 6. The mysterious person is Wall Street investment bank JP Morgan Chase.
And Goldman Sachs may also join a lot of buying copper. The company’s report on December 1 showed that the company expects that the international copper price in December 2011 will rise to US$11,000 each. Therefore, the purchase of the December contract for December delivery is one of its seven investment proposals in the commodity sector. .
At present, all parties judge that even if judged by fundamental factors alone, copper prices will rise further next year. According to a report by the International Copper Research Organization in Lisbon on November 23, in the first eight months of this year, the global copper supply gap reached 363,000 tons. Barclays Capital’s November 11 report shows that next year’s copper demand will increase by 4.2%, while global production will only increase by 2.6%.
Analysis of the potential impact of the base metal ETF** 1. The base metal ETF** will have the role of short-term boost. The basic metal ETF** and precious metal ETF** have basically the same investment attributes. The purpose of investors investing in this category is to preserve value, which is typical of hedge inflation-type products. The base metal ETF** is not a simple unilateral buy-in**. In fact, the traditional commodity index ** is also a unilateral investment direction with long positions or long positions but no short positions. This is basically the same as the basic metal ETF** that is gradually being introduced, but traditional commodities The index ** has not become a new driving force that affects the fundamentals of the industry and then affects prices in the long term. However, if investors concentrate on buying basic metal ETF** in a certain period of time, it will actually form a more concentrated demand, and then hit the market. At present, ETF financial products that need physical possession will indeed affect the short-term price fluctuations. . However, we believe that its impact is difficult to sustain in the medium to long term. Because the upward expectations of market inflation will prompt investors to purchase ETFs in order to preserve the value, but if there is a market tightening forecast, it may quickly prompt investors to sell their holdings of metals, thereby forming a downward shock to the market. .
2. The base metal ETF** will, to a certain extent, distort industry supply and demand fundamentals. Since the base metal ETF** is linked to the physical stock, the market needs to transfer a certain amount of base metal as its issuance reserve, making the metal market in its original production. Apart from consumer demand, some additional speculative and speculative supplies are needed. When the purchase of basic metal ETF** is large, speculative demand will be relatively strong. When the redemption amount of basic metal ETF** is relatively large, speculative supply will be relatively strong. In this context, speculative demand and supply are further amplified by the large number of small funds participating in the bid for the base metal ETF**. The analysis of the fundamental and short-term failures of the traditional fundamentals of supply and demand in the industry may further intensify.
3. Currency environment, emergencies and government supervision activities will significantly affect the basic metal ETF**
The buying and selling behavior of the basic metal ETF** has little connection with industrial production and commercial activities, and its investment direction will be based more on currency protection and price movement trends. In the short term, with the launch of the Fed’s QEII, several investment institutions quickly launched the base metal ETF**, and the amount of purchases in the spot market is relatively large. If the current calculation is based on the current size of 180,000 tons of copper, Occupy 1% of the global annual production. This is also likely to be one of the factors causing the extreme turmoil in the base metal market since late October. Factors such as a loose monetary environment, abundant liquidity, and loose supervision are warm nests where speculative activity is prevalent. Tight monetary conditions, local economic and social crises, and stringent government supervision activities are likely to squeeze out speculative activities. Therefore, future trends in the analysis of the underlying metal ETF** will be based more on the currency environment, inflation expectations, local social and economic emergencies, and the attitude of regulatory authorities.
According to foreign media reports, since October this year, three agencies have applied to the US Securities Exchange to launch the spot copper trading ETF**. JPMorgan's spot copper ** will receive support of 61,800 tons of physical copper; BlackRock's iShares Copper Trust will hold 121,200 tons of copper; ETF Securities will also establish a **, but did not specify how much t will be held copper. Another source said that Goldman Sachs and Deutsche Bank also intend to launch the spot copper ETF**.
According to reports, the spot copper ETF** is not just a paper contract, but it allows retail investors to invest in spot copper stored at the London Metal Exchange warehouse. This means that ETF transactions must be backed by physical copper, which will inevitably push up copper prices. Insiders pointed out that copper producers and buyers are very concerned about the actual user's inventory situation, if the current inventory is occupied by transactions such as ETF, producers will not be put into production, this phenomenon is very dangerous for the copper market, It can easily cause large fluctuations in prices.
The news that the international investment banks plan to launch the spot copper ETF** has brought the recent mysterious buyer's massive copper accumulation in the international copper market to surface. The trading record of the London Metal Exchange (LME) shows that a mysterious buyer bought more than $1.5 billion worth of copper on November 23, accounting for 50% to 80% of the stock's 350,000t, with a minimum of 17 More than ten thousand tons. The transaction immediately triggered market concerns about the shortage of copper supply. Spot copper prices were immediately pushed up to $8,700 per barrel, setting the highest price since the financial crisis in October 2008. The British "Daily Telegraph" broke the news on December 6. The mysterious person is Wall Street investment bank JP Morgan Chase.
And Goldman Sachs may also join a lot of buying copper. The company’s report on December 1 showed that the company expects that the international copper price in December 2011 will rise to US$11,000 each. Therefore, the purchase of the December contract for December delivery is one of its seven investment proposals in the commodity sector. .
At present, all parties judge that even if judged by fundamental factors alone, copper prices will rise further next year. According to a report by the International Copper Research Organization in Lisbon on November 23, in the first eight months of this year, the global copper supply gap reached 363,000 tons. Barclays Capital’s November 11 report shows that next year’s copper demand will increase by 4.2%, while global production will only increase by 2.6%.
Analysis of the potential impact of the base metal ETF** 1. The base metal ETF** will have the role of short-term boost. The basic metal ETF** and precious metal ETF** have basically the same investment attributes. The purpose of investors investing in this category is to preserve value, which is typical of hedge inflation-type products. The base metal ETF** is not a simple unilateral buy-in**. In fact, the traditional commodity index ** is also a unilateral investment direction with long positions or long positions but no short positions. This is basically the same as the basic metal ETF** that is gradually being introduced, but traditional commodities The index ** has not become a new driving force that affects the fundamentals of the industry and then affects prices in the long term. However, if investors concentrate on buying basic metal ETF** in a certain period of time, it will actually form a more concentrated demand, and then hit the market. At present, ETF financial products that need physical possession will indeed affect the short-term price fluctuations. . However, we believe that its impact is difficult to sustain in the medium to long term. Because the upward expectations of market inflation will prompt investors to purchase ETFs in order to preserve the value, but if there is a market tightening forecast, it may quickly prompt investors to sell their holdings of metals, thereby forming a downward shock to the market. .
2. The base metal ETF** will, to a certain extent, distort industry supply and demand fundamentals. Since the base metal ETF** is linked to the physical stock, the market needs to transfer a certain amount of base metal as its issuance reserve, making the metal market in its original production. Apart from consumer demand, some additional speculative and speculative supplies are needed. When the purchase of basic metal ETF** is large, speculative demand will be relatively strong. When the redemption amount of basic metal ETF** is relatively large, speculative supply will be relatively strong. In this context, speculative demand and supply are further amplified by the large number of small funds participating in the bid for the base metal ETF**. The analysis of the fundamental and short-term failures of the traditional fundamentals of supply and demand in the industry may further intensify.
3. Currency environment, emergencies and government supervision activities will significantly affect the basic metal ETF**
The buying and selling behavior of the basic metal ETF** has little connection with industrial production and commercial activities, and its investment direction will be based more on currency protection and price movement trends. In the short term, with the launch of the Fed’s QEII, several investment institutions quickly launched the base metal ETF**, and the amount of purchases in the spot market is relatively large. If the current calculation is based on the current size of 180,000 tons of copper, Occupy 1% of the global annual production. This is also likely to be one of the factors causing the extreme turmoil in the base metal market since late October. Factors such as a loose monetary environment, abundant liquidity, and loose supervision are warm nests where speculative activity is prevalent. Tight monetary conditions, local economic and social crises, and stringent government supervision activities are likely to squeeze out speculative activities. Therefore, future trends in the analysis of the underlying metal ETF** will be based more on the currency environment, inflation expectations, local social and economic emergencies, and the attitude of regulatory authorities.