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JJU vs. ETF Alternatives
The Dow Jones-UBS Aluminum Subindex Total ReturnSM is a sub-index of the Dow Jones-UBS Commodity Index Total ReturnSM and is intended to reflect the returns that are potentially available through an unleveraged investment in the futures contracts on physical commodities comprising the index as well as the rate of interest that could be earned on cash collateral invested in specified Treasury Bills. The Dow Jones-UBS Aluminum Subindex Total ReturnSM is a single-commodity sub-index currently consisting of one futures contract on the commodity of aluminum, which is included in the Dow Jones-UBS Commodity Index Total ReturnSM.
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Friday, Dec 272013, 4:29 AM
Friday, Dec 272013, 4:29 AM| 15 Comments
- The WSJ shines a light onto "shadow warehouses," a hidden system of facilities that store tens of millions of tons of aluminum, copper, nickel and zinc across the globe for banks, hedge funds and commodity merchants.
- The warehouses operate outside the London Metal Exchange's system, are unregulated, and don't provide details of their holdings. As a result, it's unclear how much metal is held in the shadow system. This lack of visibility could cause major price swings.
- The WSJ article follows allegations that warehousing companies have artificially boosted the price of metals, particularly aluminum.
- Companies that operate metals warehouses include Goldman Sachs (GS), Glencore Xstrata (GLCNF) and JPMorgan (JPM), although the latter is looking to sell its commodities unit.
- Relevant tickers include VALE, AA, AWC, KALU, MNSF, CENX, NOR, BHP, RIO, ACH.
- ETFs: DBC, JJC, DBB, DJP, GSG, RJI, GCC, USCI, CFD, JJN, JJT, BOM, RGRC, CPER, CTF, RJZ, GSC, LSC, GSP, JJU, DEE, BDD, BOS, JJM, DYY, DDP, DJCI, LD, CMD, BCM, CUPM, UCI, RGRI, UCD, UBM, FOIL, BDG, LEDD, CMDT, SBV, USMI, DPU, NINI, FTGC, CSCB, CSCR, HEVY
Thursday, Nov 72013, 3:20 PM
Thursday, Nov 72013, 3:20 PM| 3 Comments
- Alcoa (AA -7.2%) shares tumble as the LME reveals final rules designed to speed the delivery of metal out of its global warehousing network.
- The LME's rule essentially would force warehouses that are home to long waits for metal to deliver out more metal than they take in, a move analysts say could speed the flow of aluminum out of warehouses and pressure prices lower.
- Alcoa, which had criticized proposed changes, now voices support for a "more transparent marketplace" while calling on the exchange to give a clear outline on when it plans to implement the new rules.
- Also: CENX -7.9%, KALU -1.9%, ACH -1.3%, NOR -1.5%.
- Benchmark aluminum futures (JJU) are flat, trading ~$1,822/metric ton, well below the level much of the world's aluminum production requires to break even.
Wednesday, Oct 302013, 8:02 AM
Wednesday, Oct 302013, 8:02 AM| 3 Comments
- Chinese aluminum output is likely to hit a record 24M metric tons this year, a research director at top producer Chalco (ACH) says, suggesting production may ramp up towards year-end.
- China's growth in aluminum output means it has had little need for imports from global markets where stocks are sitting at record highs, with prices falling to a four-year low below $1,800/metric ton in June.
- China's aluminum production grew by almost 9% to 16.2M metric tons in the first nine months of 2013 vs. 19.9M for all of last year; total capacity is seen at 32M by the end of this year.
- Related: AA, JJU.
Thursday, Oct 242013, 6:55 PM
Thursday, Oct 242013, 6:55 PM| 3 Comments
- No wonder top aluminum makers Alcoa (AA) and Rusal are the most vocal opponents of an LME proposal aimed at easing bottlenecks of aluminum stored at warehouses: They've reaped ~$1.4B in revenues from higher fees amid the logjam, WSJ reports.
- Many analysts say these premiums are likely to shrink from record levels if the new warehouse rules are implemented; lower premiums would hit a stream of revenue aluminum companies have come to rely on since 2010, because prices for the metal itself have languished in recent years.
- Big banks have attracted most of the scrutiny from regulators because they own warehouses in the LME system, but the pushback from Alcoa underscores how any fallout from changes could reverberate beyond Wall Street.
- ETF: JJU.
Friday, Sep 202013, 9:42 AM
Friday, Sep 202013, 9:42 AM| 1 Comment
- A senior executive of the world’s largest aluminum producer, Russia’s Rusal, says 40% of global aluminum production is unsustainable at current prices, which may not bode well for Alcoa's (AA -0.9%) Q3 results when they're announced early next month.
- Global aluminum supply exceeded demand in the first seven months of this year by 773K metric tons, while the surplus in all of 2012 was 506K; BHP, RIO and CENX all have increased production significantly YTD.
- Alcoa managed to lower its costs by $64/metric ton in Q2 but its realized price fell by $92/metric ton, and there's no reason to believe prices have gone anywhere but down in Q3, Paul Ausick writes.
- ETF: JJU.
Thursday, Jul 252013, 7:55 PMGoldman Sachs makes the case for holding commodities as a strategic move. On Brent crude, the market should be well supplied in H2 as significant non-OPEC supply comes online and weak Chinese trade data signals relatively weak demand. Gold prices should decline to $1,050/oz. by year-end 2014 given a less accommodative Fed. Potash producers will maintain discipline and good margins despite falling crop prices. |Thursday, Jul 252013, 7:55 PM| 11 Comments
Thursday, May 162013, 2:54 PMAluminum demand is strong despite record-high inventories and will be further buoyed in coming years by increased usage in the automotive and aerospace industries, a top Alcoa (AA +0.6%) and other industry players tell CRU's World Aluminum congress. Alcoa says it is investing $575M in two new U.S. automotive sheet production facilities to meet North American demand that should quadruple by 2015. |Thursday, May 162013, 2:54 PM| 4 Comments
Tuesday, May 142013, 7:49 AMThe aluminum market (JJU) remains vastly oversupplied, even as the world’s top producer United Co. Rusal cuts Q1 output 4% to trim the global surplus that’s helped send prices 10% down YTD. A push by China to bolster aluminum production in Xinjiang province is adding to excess domestic stocks, Rusal notes. Also, LME-approved warehouses globally are piled high with 5M-plus tons of the metal. |Tuesday, May 142013, 7:49 AM| 2 Comments
Monday, Mar 112013, 11:13 AMKentucky state lawmakers are set to decide whether to let Century Aluminum (CENX -3.7%) buy power on the open market in its bid to save its money-losing smelter from closure. The bill could have implications for the U.S. aluminum industry, as high-cost electricity for aging plants has challenged producers to seek more efficient operations with aluminum prices dropping ~30% in two years. |Monday, Mar 112013, 11:13 AM| Comment!
Thursday, Mar 72013, 10:30 AMSumitomo raises its forecast for a global aluminum surplus to the highest level in two years, saying demand from China won’t be enough to absorb new capacity. Supply is projected to outpace demand by 866K metric tons this year from 760K tons in 2012; China alone will have a surplus of ~510K tons after years of smelting capacity expansion. |Thursday, Mar 72013, 10:30 AM| Comment!
Friday, Nov 162012, 9:32 AMIndustrial metals prices are set to rally into the middle of 2013, says Westpac's Justin Smirk, who has the hottest hand in forecasting of late. He's keeping it simple: Easy money in the U.S. and Europe will combine with a rebounding Chinese economy. Copper, zinc, nickel, and aluminum are all headed higher. |Friday, Nov 162012, 9:32 AM| Comment!
Thursday, Apr 122012, 2:49 PM
Thursday, Apr 52012, 9:53 AMAlcoa (AA +0.1%) will make further cuts in alumina production in response to weak demand, and to avoid aggravating oversupply in the Atlantic region. The company is slashing output capacity by 390K tons, having lowered refining capacity by 531K tons in January. Alcoa has total global refining capacity of 18M tons/year. |Thursday, Apr 52012, 9:53 AM| Comment!
Wednesday, Feb 12012, 3:42 PMIndustrial metals enjoyed January's risk rally, with the basket of futures trading on the LME rising 10.9%, led by tin (JJT), up 26.5%. Looking to sink below $3/lb. 3-4 months ago, copper (JJC) has rallied all the way back to $3.84, and resurfaced bullish talk that there's just not enough of the metal being mined. |Wednesday, Feb 12012, 3:42 PM| 1 Comment
Thursday, Jan 122012, 3:22 PMThere's carnage in the grain pits after today's final USDA report on the 2011 harvest shows greater-than-expected production and ending stocks, surprising traders who had been leaning the other way. Corn was locked limit down all day, -6.1% at $6.11/bushel. Wheat -6.2% at $6.01. Beans -1.6% at $11.83. (ag stocks) |Thursday, Jan 122012, 3:22 PM| 6 Comments
Tuesday, Dec 202011, 9:12 AMGoldman is lowering its 12-month aluminum price forecast to $2,400/ton, from a prior $2,650/ton, though the new target still represents a healthy increase from aluminum's current price of less than $1,900/ton. The firm expects production cutbacks from Chinese companies, some of whom are losing money, to bolster prices. Aluminum makers such as AA, NOR, CENX, ACH, and KALU have had a rough year. |Tuesday, Dec 202011, 9:12 AM| 1 Comment
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David Jackson:: Thanks! Great link.
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Ocean Man:: Not that you can see through the internet, but it took me a while to get that.
Dr. Kris:: Dr. Kris is all-seeing, all-knowing (and also all-full-of-crap). You can run, but you can't hide, Grasshopper.