State Reserve Bureau (SRB) will meet Wednesday in Beijing to
bid for aluminum from Aluminum Corp. of China Ltd. (Chalco) and
its affiliates, market sources said.
Purchase prices will be set that
day, and quantities will be capped at 400,000 tonnes, as
previously rumored, two sources told AMM sister
publication Metal Bulletin on Monday.
But aluminum tags wont
rise much, they said.
"(The SRB buys will be) no use,
given that Chalcos cost of production is way above 16,000
yuan ($2,543 per tonne), and 400,000 tonnes is such a small
amount," one source said.
Output costs at Chinas
private aluminum smelters, which are excluded from SRBs
tenders, can be as low as 12,000 yuan ($1,925) per tonne, she
"SRBs budget for
stockpiling has come from government finance and has got to be
spent, even for things that some people might think were not
worthwhile," one market participant in Beijing said.
Ningxia Qingtongxia Energy
Aluminium Group, the other state-owned aluminum producer, might
also attend Wednesdays tender.
But there has been no confirmation that the SRB will also
stockpile copper, market participants said.
A version of this article was first
published by AMM sister publication Metal