Is an Aluminum ETF Imminent?
July 2nd, 2010 at 1:00am by Tom Lydon
Aluminum demand remains strong enough that prices may recover, despite lingering problems still weighing down on world economies. Investors may play the recovery in aluminum with the new aluminum exchange traded fund (ETF) that is expected to launch next month.
United Co. Rusal, the world’s premier producer of aluminum, stated that aluminum prices will recover to $2,400 a metric ton by year’s end on healthy demand for the metal, reports Aya Takada for Bloomberg. Rusal previously projected in April that aluminum’s average prices will be more than $2,000 a ton for 2010. [Minor Metals to Get an ETF.]
In London, aluminum prices diminished 10% so far this year on concerns that the Europe debt problems and China’s conservative measures would reduce demand and slow the global recovery.
On the London Metal Exchange, aluminum three-month delivery is currently at around $1,988 a ton.
The CEO of United Co. Rusal announced that an ETF based on aluminum will launch next month, according to Forbes. However, it has not been confirmed which firm would actually launch the ETF. Such a fund has been demanded by investors for awhile now, so we’re closely watching for developments. [Aluminum ETF Could Have Big Impact on Prices.]
For more information on aluminum, visit our aluminum category.
For now, these are some options for playing aluminum:
- iPath DJ-AIG Aluminum ETN (NYSEArca: JJU)
- SPDR S&P Metals & Mining (NYSEArca: XME)
- PowerShares DB Base Metals (NYSEArca: DBB)
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.