SHANGHAI Chinas 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 added.
"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 Bulletin.