China Easing Hopes Boost Copper; Bumpy Road for JP Morgan ETF-1

High hopes for monetary easing in China, together with strong US housing data, are lifting copper prices this week. In addition, the greenback's slide has also helped prop up demand for the red metal.aggregate equipment for sale
The speculation is that Beijing will cut the reserve ratio requirement for banks as early as this weekend. That would mark the third time in two months that the central bank intervened to rev up China's economic engine. There is growing expectation too of further public spending plans as part of a broader stimulus package to boost domestic demand. That would increase infrastructure investments which in turn would increase demand for copper and other industrial metals.
Meanwhile, US housing starts for June reaching their highest level in over three years, spurring investors' appetite for copper. Housing construction rose 6.9 percent to a seasonally adjusted annual rate of 760,000 units, the highest level since October 2008.hardness of minerals
In late afternoon trade Thursday, Comex copper for September trade was up 1.45 percent at $3.52 a pound.
The possibility of a copper ETF, however, is facing political pressure. Earlier in the week, Senator Carl Levin (D-Mich) became the first member of Congress to publicly oppose JP Morgan Chase's plan to establish an exchange-traded fund backed by copper. Levin said it should be stopped as it would be disruptive to the red metal's physical market.
select grind millIn a letter to the Securities and Exchange Commission, Levin stated that if the JPM XF Physical Copper Trust trades on the New York Stock Exchange, "there is ample evidence that the proposed ETF will disrupt the market supply of copper by removing from the market a substantial percentage of the copper available for immediate delivery. This supply disruption is likely to affect the cash and futures market for copper, increasing volatility and driving up its price to create a bubble and burst cycle."
Company news
Freeport-McMoRan (NYSE:FCX) reported consolidated copper sales reached 927 million pounds compared to 1.0 billion pounds during the same period a year ago. For the full year, the company expects copper sales to reach 3.6 billion pounds. The Arizona-based company is assuming copper prices to average $3.50 a pound as it estimates operating cash flow for the year to reach $4.0 billion this year. In the second quarter, the figure reached $1.2 billion.
Ahead of the release of Freeport's latest results, however, Citigroup lowered its price target for Freeport McMoRan's amid worries about a continued fall in copper prices. Meanwhile, Nomura Securities maintained its "neutral" position for Freeport-McMoRan. Last month, however, Jeffries kept is "buy" recommendation for the world's largest publicly traded copper producer and ranked it as the research group's top pick in North American Metals and Mining, arguing that the current valuation discounts further material weakness in copper.