China Called to Suspend Stockpiling Nonferrous Metals in H1, Association Officia

BEIJING, Apr. 28 - China should suspend reserving nonferrous metals in the first half year since the earlier government stockpiling has already played positive effects on the market and the one-million-ton reserve plan in three years has been completed by almost 60 percent, said Wen Xianjun, vice chairman of China Nonferrous Metals Industry Association (CNMIA).

According to the government's stimulus plan for nonferrous metals industry, China will purchase one million tons of aluminum for state reserve in three years. Up to now, it has purchased 590,000 tons or 59 percent of the total.

Aluminum prices in China have gone steady since December last year, but started dropping from April 13. Prices of Shanghai aluminum futures contracts have dived from 14,900 yuan/ton to 12,740 yuan/ton, close to the cost price.

Market expects the government to buy more aluminum in a bid to curb the price from slumping below the cost price.

However, Wen's remark showed his opposition to government reserves, which may exert great impact on the next move of the State Reserve Bureau, some analysts say.

Wen added that March and April are the peak period for the domestic aluminum enterprises to resume production. Therefore, large aluminum capacity will be released in May, which may lead to further slide of aluminum prices, analyzed Wen.

The domestic aluminum prices are expected to hover around cost price of 12,000-125,000 yuan/ton for the whole year, noted Wen.

(Source: chinamining.org)