ETF Securities listed physically backed exchange-traded commodities (ETCs) for aluminium, zinc and lead on the London Stock Exchange on Tuesday, it said. The physically backed industrial metal ETCs, follow previous listings of copper, nickel and tin , which launched on 10 December 2010.
The launch of metal-backed securities initially sparked concerns investors will crimp supply already under stress in some metals from falling ore grades and rising industrial use, ultimately adding inflationary pressure, Reuters noted, but, so far take-up of the initial three has been slow. Tin warrants currently held amount to 405 tonnes, equivalent to about 2% of total LME stocks, while holdings of copper and nickel are equivalent to less than 1% of total warrant holdings. There has been no change in tin holdings since early February. Relatively high costs of storage have been identified as one of the main drawbacks of the base metals physical ETCs.
