日批在线视频_内射毛片内射国产夫妻_亚洲三级小视频_在线观看亚洲大片短视频_女性向h片资源在线观看_亚洲最大网

Economy

Markets

Industries

Insights

Reports

Events

Aluminum stocks on a roll

By Yu Hongyan (China Daily)
Updated: 2009-02-20 08:01

China's State Reserve Bureau (SRB) is to buy 400,000 tons of aluminum from the country's seven major aluminum smelters today, in an effort to shore up the struggling industry affected by the global economic downturn, according to industry insiders.

Related readings:  Aluminum producer H1 net profit down 65.56%  China may impose 5% tax on aluminum imports  State reserve agency stockpile to buoy aluminum sector  Chalco cuts output of high-cost aluminum

SRB, affiliated to the country's top economic planning agency, the National Development and Reform Commission, will hold a bidding today, sources from the Aluminum Corporation of China Limited (Chalco) said. Chalco is one of the seven invited smelters for the bidding.

The purchasing price may be set at around 12,500 yuan per ton, with payment in two months.

Global aluminum prices suffered from the financial crisis, with futures sinking by more than half at the London Metal Exchange from its peak in July.

"The SRB's move will help ease pressure on stocks and shore up the struggling industry from losses, as aluminum production cost here is higher than the world average", said Zhang Fang, an analyst from China Securities Research.

The SRB bought 290,000 tons of aluminum ingots from smelters at a price of 12,350 yuan per ton in December 2008, which pushed up aluminum prices to 12,000 yuan per ton from 10,155 yuan per ton. That made it possible for producers to break even.

But the surge in prices surpassed the world's average price, and lured some traders to import electrolytic aluminum, diluting the SRB's efforts to help ailing domestic players.

"I do not understand the SRB's move as the domestic price is already higher than the international average," said Heng Kun, an analyst from Essence Securities. "I'm afraid it would end up benefiting foreign aluminum smelters. The purchase is puny compared to the 1 million aluminum stock."

Meanwhile, the weakened housing and automobile industry, which account for 40 percent of the aluminum consumption, also shed a gloomy light on the aluminum market.

To offset the side effect of the purchase, China may resume a 5-10 percent tax on imports of primary aluminum from March 1, two years after its cancellation.

But an insider from Chalco, said the imported price would still be lower despite a 5 percent tax, and the tariff may attract charges of protectionism.