ETFS to issue physically-backed industrial metal ETCs

ETF Securities is preparing to issue a range of physically-backed industrial metal exchange-traded commodities (ETCs).

The range will include exposure to aluminium, copper, lead, nickel, tin, zinc, as well as a basket containing all six of these metals.

The announcement from ETFS follows the recent opening of the firm's metal account with the London Metal Exchange (LME). ETFS is proposing that applications and redemptions by market makers are made against delivery of LME warrants.

These warrants are certificates for a specific tonnage of an approved brand of metal in a LME warehouse and are used to settle short positions.

Deutsche Bank in London will provide trading, administration and custody services for the industrial metals and products.

ETFS CEO Graham Tuckwell says: "This new platform is intended to provide investors with exposure to physical industrial metal without the need to purchase and store such metal directly."

He says the physically-backed structure, and the use of LME warrants, will ensure secure and transparent access to the physical metals market.

He adds: "These products will complement our existing offerings which are priced off futures prices rather than cash market prices."