Wednesday, May 12, 2010

Alcoa (NYSE:AA) May Benefit from Aluminum ETFs

The move to develop aluminum ETFs could be a huge boon to the aluminum industry, and Alcoa (NYSE:AA) could be a strong beneficiary of that in the years ahead, as ETFs seek physical aluminum to back their funds.

Estimates are aluminum could increase in price by $500 a metric ton, a 24 percent gain, if the aluminum ETFs are launched, which is pretty much a surety.

Several funds are already in place technically, now they're looking for financing in order to shore up their positions in the beginning of their existance.

Rusal, the largest provider of aluminum in the world has said they have been in negotiations with banks to supply the ETFs, but it seems they are having problems meeting all the demand, which Alcoa would probably be the main aluminum supplier next in line to meet the aluminum needs of the funds.

No comments: