Bloomberg reported that Alcoa Inc supports the creation of an exchange traded fund backed by the lightweight metal and would be interested in supplying aluminum for such a product.
Mr Klaus Kleinfeld CEO of Alcoa said that we would be very open to it, very supportive of it. We would be open to supply metal. Aluminum ETF would allow investors to hold the metal without the capital requirements and warehousing costs involved in owning the physical metal that’s traded on the London Metal Exchange.
Analysts showed last month that aluminum will most likely be the first industrial metal used to back an exchange traded product. Already USD 100 billion has been invested in precious metal funds.
Mr Oleg Deripaska the CEO and biggest shareholder of Moscow based UC Rusal said in June that his company and other producers were in talks to supply the metal to a fund. ETF Securities Limited manager of USD 22 billion in assets said that it’s preparing to start exchange-traded commodities funds backed by six industrial metals including aluminum and copper.
Mr Kleinfeld said that following a day of presentations by Alcoa to investors in today’s world, where there is more and more volatility, people have discovered that aluminum can be a very interesting asset class by itself.
Mr Timothy Reyes president of materials management at Alcoa said that there will be a suite of base metals ETFs eventually including aluminum ETF. He spoke in response to a question during one of the presentations. Alcoa also forecast aluminum demand climbing 13% this year and doubling by 2020.
Aluminum for delivery in 3 months on the LME dropped USD 21 to close at USD 2,448 per tonne. The metal, used in beverage cans and auto body panels, has advanced 9.8% this year. Global inventories tracked by the LME have declined 7.9% in 2010 to 4.26 million tonnes.