Aluminium ETP awaits regulatory approval - Report

Thursday, 19 Aug 2010
Reuters reported that a physically backed aluminium exchange traded product planned by Glencore International and Credit Suisse is likely to be launched on a Swiss exchange.

The source said that the size of the ETP, which would allow investors to invest in aluminium without the complications of managing a physical stockpile or repeatedly rolling forward contracts on the London Metal Exchange, would depend on how popular the fund proves to be. The ETP would buy metal only after investors purchase units.

He said that the launch has been waiting for the final approval for ages. The ETF can be launched the day the regulator agrees. The two essential processes of organizing the ETP securing suppliers of the metal and finding a warehousing system to stock it had been arranged.

Although the fund itself may not have stocked up on any metal yet, market watchers say a steady fall in LME stocks over the past three months may be the result of potential suppliers acquiring material with which they could start the investment vehicle.

A trader in Sydney said that there is no shortage of aluminium and the steady deliveries out of LME warehouses may be low level buying by someone linked to the ETF putting together a stockpile.

(Sourced from Reuters)