Aluminum Producer Is In Talks To Supply Metal To Banks For Possible Aluminum ETFs
Aluminum may record a gain of $500 per metric ton, or 24%, if providers of exchange-traded funds introduce ETFs backed by the metal, Citigroup (NYSE:C) told Bloomberg. According to David Thurtell, a Citigroup (NYSE:C) analyst, the forecast is based on an ETF holding aluminum that global consumers would use in two weeks, or about 1.4 million tons.”The abundance of aluminum stocks makes an aluminum ETF more likely than a nickel or copper ETF,” Thurtell told Bloomberg.
“The move could replicate the performance of ETFS Physical Palladium Shares (NYSE:PALL). The ETF was launched in January this year and has had an increase of 24% since till date. According to Daniel Major, commodity strategist at RBS, the inflow of money into palladium ETFs worldwide was equivalent to 28% of estimated palladium consumption in first-quarter 2010,” Don Dion Reports From The Street.
Dion goes on to say, “London Metal Exchange aluminum for delivery in three months closed down 2% at $2,105 a ton on May 11. During the last one month, the metal has declined 15%, retreating from its 52-week high of $2,472 a ton recorded on April 15. The launch of an Aluminum ETF can offset these losses going forward.”
On April 21, Rusal, the world’s biggest aluminum producer, said it was in discussions to supply metal to banks for possible ETFs. At least three aluminum ETFs are “technically” ready to be offered to investors, said Oleg Deripaska, Rusal’s chief executive officer.
“London Metal Exchange reported inventory levels of about 4.5 million tons, the highest across metals and almost eight times inventories of second-highest zinc. Although, aluminum inventory levels have fallen 3% this year, they have increased 7% year-over-year,” Dion Reports.
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ETFS Physical Palladium Shares (NYSE:PALL)
The investment seeks to replicate, net of expenses, the return equivalent to movements in the palladium spot price. The fund will hold physical palladium bullion.
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