Citigroup (C) Analyst Says Aluminum Prices Could Spike On The Release Of Aluminum ETFs
Aluminum may rise by $500 a metric ton if providers of exchange-traded funds introduce ETFs backed by the lightweight metal, Citigroup Inc. (NYSE: C) said, implying a potential 24 percent gain.
“The forecast is based on an ETF holding aluminum that global consumers would use in two weeks, or about 1.4 million tons, David Thurtell, a Citigroup (C) analyst in London, said in a report today. United Co. Rusal, the world’s biggest producer, said last month it was in talks to supply metal to banks for possible ETFs,” Chanyaporn Chanjaroen Reports From BusinessWeek.
Chanjaroen goes on to say, “Introducing investment products would stoke demand for aluminum, which is in greater supply than any of the five other main metals traded on the London Metal Exchange. Warehouses tracked by the exchange hold about 4.5 million tons of aluminum, almost eight times inventories of zinc, which has the second- largest stockpile among the main LME metals.”
“The abundance of aluminum stocks makes an aluminum ETF more likely than a nickel or copper ETF,” Thurtell said.
“Aluminum for delivery in three months fell $65, or 3 percent, to $2,082 a ton at 2:09 p.m. on the LME. The metal, used in industries from packaging to aviation, has dropped 6.6 percent in 2010, paring last year’s 45 percent surge,” Chanjaroen Reports.
At least three aluminum ETFs are “technically” ready to be offered to investors, Oleg Deripaska, Moscow-based Rusal’s chief executive officer, said on April 21. Financing and warehousing costs are the main obstacles to starting the funds, according to Citibank (C).
See more to the story: HERE
Here are some stories we put together on news related to aluminum ETFs below:
Materials ETF’s Get A Boost From Alcoa’s Rosy Outlook
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Will The Aluminum ETF Soak Up A Portion Of Supply And Lend A Prop To Prices
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Aluminum To $3000: Physically Backed Aluminum ETF May Soon Become Reality
“At the ISRI Commodities Roundtable Forum on aluminum last week, one analyst reportedly suggested that aluminum could rise to $3,000 per metric ton by May 2010—quite a jump from this year’s prices, which have fluctuated between just over Read more…
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