Is an Aluminum ETF Imminent?

Includes: DBB, JJU, JJUC, XME
by: Tom Lydon

Aluminum demand remains strong enough that prices may recover, despite lingering problems still weighing down on world economies. Investors may play the recovery in aluminum with the new aluminum ETF that is expected to launch next month.

United Co. Rusal, the world’s premier producer of aluminum, stated that aluminum prices will recover to $2,400 a metric ton by year’s end on healthy demand for the metal, reports Aya Takada for Bloomberg. Rusal previously projected in April that aluminum’s average prices will be more than $2,000 a ton for 2010.

In London, aluminum prices diminished 10% so far this year on concerns that the Europe debt problems and China’s conservative measures would reduce demand and slow the global recovery.

On the London Metal Exchange, aluminum three-month delivery is currently at around $1,988 a ton.

The CEO of United Co. Rusal announced that an ETF based on aluminum will launch next month, according to Forbes. However, it has not been confirmed which firm would actually launch the ETF. Such a fund has been demanded by investors for awhile now, so we’re closely watching for developments.

For now, these are some options for playing aluminum:

  • iPath DJ-AIG Aluminum ETN (NYSEARCA:JJU)
  • iPath DJ-AIG Aluminum ETN Callable (Pending:JJUC)
  • SPDR S&P Metals & Mining (NYSEARCA:XME)

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Metals, Mining ETF, Aluminum

  • PowerShares DB Base Metals (NYSEARCA:DBB)

Base Metals, DBB, Aluminum

Max Chen contributed to this article.

Disclosure: None