Wednesday, May 12, 2010

Alumina (NYSE:AWC), Kaiser Aluminum (Nasdaq:KALU), Century Aluminum (Nasdaq:CENX) Could Rise on Demand from Aluminum ETFs

The entire aluminum industry, including companies like Alumina (NYSE:AWC), Kaiser Aluminum (Nasdaq:KALU) and Century Aluminum (Nasdaq:CENX) could all get a much needed boost from the introduction of aluminum ETFs, which would dramatically affect the demand for the metal, as ETFs are backed by the physical holding of aluminum.

Even though these companies may not participate in the providing of aluminum for the ETFs, the price of aluminum will increase, giving a boost to all of them.

This is good news for the industry, which has struggled recently because of the slowing demand for the lightweight metal.

India and China are expected to increase demand this year, and that could help, but if that does happen, and you add to that the new market to supply aluminum to ETFs, and the future has suddenly become much brighter for aluminum producers, as far as it relates to aluminum prices.

1 comment:

Anonymous said...

If you listen to Century's earnings call, the analyst Q&A, creating these ETFs is really a non-issue with little projected impact worldwide aluminum demand.