Citigroup (NYSE:C) said today the price of aluminum could soar by as much as $500 a metric ton if plans to introduce aluminum-backed ETF funds comes to fruition. Companies like Alcoa (NYSE:AA), Century Aluminum (Nasdaq:CENX) and Alumina (NYSE:AWC) would be beneficiaries of those increased prices, as would investors in aluminum futures.
If the prices were to rise by that much because of the introduction of aluminum ETFs, it would represent an increase of aluminum prices of just under 25 percent.
Projections by Citigroup are based on aluminum customers from around the world having their aluminum held by an aluminum ETF for a two-week period, which would equal 1.4 million tons.
The price of aluminum has been down as demand has been slow in the difficult economic times.
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