Obscure Tin ETN is on Fire

It may not be investors’ first thought when it comes to commodities exchange traded products, but the iPath Dow Jones-UBS Tin Sub-Index Total Return ETN (NYSEArca: JJT) has been on quite the run.

Over the past three months, JJT is higher by 22.4%. Last Friday, the ETN gained half a percent on volume that was more than quadruple the daily average. JJT “reflects the returns that are potentially available through an unleveraged investment in the futures contracts on tin. The Index currently consists of one futures contract on the commodity of tin which is included in the Dow Jones-UBS Commodity Index Total Return,” according to iPath.

While JJT has been on a strong run even as some other commodities ETFs and ETNs have languished, the tin play could be poised to deliver more upside. [Chart of the Day: Tin ETN]

JJT’s upside could come by way of an interesting situation. Indonesia, the world’s biggest producer of tin, is angling to replace the London Metal Exchange as the global benchmark for tin trading, according to Bloomberg.

Indonesia, Southeast Asia’s largest economy, has recently limited exports of tin to local exchange, helping to worsen supply shortage while boosting volatility in tin futures, Bloomberg reported.

The country’s Commodity Futures Trading Regulatory Agency is reportedly hoping to push tin prices to $25,000 to $29,000 per metric ton, though some market observers doubt the plausibility of the upper end of that range being seen.