Sprott Physical Copper Trust set to trade on TSX

The Toronto Stock Exchange said Sprott Physical Copper Trust [COP.UN-TSX] will be listed at 5:01 p.m. on June 5, 2024 for trading at the open on June 6, 2024. According to the TSX, there will be up to 10 million units of the trust issued and outstanding, and 1.5 million reserved units. The Canadian dollar units will trade under the symbol COP. UN, and the U.S. dollar units will trade under the symbol COP. U.

The TSX reports that the trust was created to invest and hold substantially all of its assets in copper. It seeks to provide a secure, convenient and exchange-traded investment alternative for investors interested in holding copper without the inconvenience that is typical of a direct investment in copper. According to the TSX, the trust does not expect to pay regular cash distributions to unitholders.

The trust’s manager is Sprott Asset Management LP and its trustee is RBC Investor Services Trust.

As stated in its prospectus dated May 31, 2024, the trust is issuing up to 10 million units (and a minimum of 10 units) at US$10 per unit in a public offering that it expects to close on June 6, 2024. In addition, the trust has granted the underwriters an overallotment option to purchase up to an additional 1.5 million units from treasury at the same price.

The Sprott Physical Copper Trust shares are set to trade as commodities like copper are widely expected to play a key role in the transition to renewable energy and electrification. Copper has four properties that make it ideal for clean energy transition, including conductivity, ductility, efficiency and recyclability. Copper can be used repeatedly without any loss in performance.

Published reports say copper fell below US$10,000 a ton this week as a sharp rise in global inventories prompted traders to zero in on weak conditions in the spot market. Stockpiles on the Shanghai Futures Exchange have climbed to the highest since 2020, and there has also been a steady stream of smaller inflows into Asian depots tracked by the London Metal Exchange over the past few weeks.

Inventories typically decline at this time of year, and the jump has put pressure on prices after copper spiked to a record high of US$11,100 last month. Separately, copper rose early on May 3, 2024, after manufacturing activity in the country expanded at the fastest pace in almost two years in May, according to a private survey focused on smaller, export-oriented firm. “Even so, the ongoing rise in exchange inventories offers evidence that buyers are amply supplied for now,’’ Bloomberg news service said in a report. “That is serving as a headwind for bulls predicting that prices will soon make another push higher,’’ the report said.