ALCOA supports aluminum backed exchange traded fund

Reuters reported that ALCOA Inc would be supportive of an aluminum backed exchange traded fund or ETF whether or not it provided metal to back up the security.

Mr Klaus Kleinfeld chairman and CEO of ALCOA said that we are totally supportive. I have said that many, many times, totally supportive. However, challenges remain to actually bringing aluminum ETF to market but he was optimistic they would be resolved.

He said that the structure is one; physical metal premium is another one. And then, the question of what do you do with large redemptions that require large and major cash outflows? So, these things still need to get solved.

Noting RUSAL has said recently it would likely supply aluminum as an underlying asset for an ETF, the analyst asked Mr Kleinfeld whether Alcoa would do the same.

Mr Kleinfeld said that yes, we would definitely be willing to provide metal in here and we have always said that. We were very supportive. Whether we provide metal or whether not, this is a good thing for the industry to happen. The willingness to issue aluminum ETF was an indication of the light metal's attractiveness.