NEW YORK (Reuters) - Alcoa Inc (AA.N), the largest U.S. aluminum producer, would be supportive of an aluminum-backed exchange traded fund, or ETF, whether or not it provided metal to back up the security.
Chairman and chief executive officer Klaus Kleinfeld, speaking on a conference call after reporting third quarter earnings late Thursday, said in answer to an analyst’s question, “We are totally supportive. I have said that many, many times, totally supportive.”
He added, however, challenges remain to actually bringing an aluminum ETF to market, but he was optimistic they would be resolved.
“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,” he said.
Noting RUSAL, the world’s biggest aluminum producer, has said recently it would likely supply aluminum as an underlying asset for an ETF [nTOE65S075], the analyst asked Kleinfeld whether Alcoa would do the same.
“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 CEO said, adding the willingness to issue an aluminum ETF was an indication of the light metal’s attractiveness.
Reporting by Carole Vaporean;editing by Sofina Mirza-Reid