Aluminum traders may soon get a chance to trade the metal through an exchange traded fund (ETF). Some wonder what kind of impact such a fund would have on the broader aluminum market.
History has shown that the launch of metal ETFs has had a positive effect on the price of the underlying metal that the fund tracks, remarks Karvy Global for TheStreet. Some analysts predict that aluminum prices may gain 25% above current levels.
Greg Wittbecker, director of material management at Alcoa (NYSE: AA), has commented that the top banks were moving into the physical aluminum market, which hinted at the creation of a related ETF.
Oleg Deripaska, the CEO of UC Rusal, the world’s biggest aluminum producer, stated that his company would supply the aluminum an ETF would hold. No word has yet to be provided on what fund provider would launch the fund. UC Rusal projects aluminum prices may hit $2,400 per ton by year end. [Is an Aluminum ETF Imminent?]