Wednesday, April 21, 2010

Rusal Supplying Aluminum to Banks

United Co. Rusal has said it is in talks with a number of banks to possibly make deals to supply aluminum to banks to back up exchange-traded funds with the metal.

Rusal’s deputy chief executive officer and head of capital markets, Oleg Mukhamedshin, said this is part of the strategy of the company to diversify its channels and generate more demand for alumininum.

Several aluminum ETFs are prepared to be offered to shareholders in the technical sense, but banks have to enter into a negotiation process to guarantee supplies from a variety of aluminum producers, including rivals of Rusal like Alcoa (NYSE:AA) and Rio Tinto (LSE:RIO).

With the supply of aluminum at a challenging place, expectations are aluminum ETFs won't appear on any “significant scale” until the fourth quarter.

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