Search on
News Title
News Details
Reports/Directory
Glossary
Title_head
China state stockpiler buys aluminium and zinc - Sources
356 times viewed.
Sunday, 18 Nov 2012
EmailButton
Pdf_button

Reuters reported that China's state stockpiler kicked off its latest buying spree taking volumes of 100,000 tonnes each of aluminium and zinc from domestic smelters in a move that may only have fleeting impact on sentiment.

While smaller than planned, the purchases may signal the state reserves body thinks prices have hit bottom and could boost investor sentiment towards metals, fuelling a recovery in global prices dogged by slowing growth and oversupply.

Mr Heng Kun chief analyst at Essence Securities said that three month aluminium is down nearly 3% this year on the London Metal Exchange while zinc is up 5%. The boost from the stockpiling action by the State Reserves Bureau in the world's largest consumer of base metals would dissipate soon.

Mr Kun said that the State Reserves Bureau's move is positive. But such one off purchases would only produce short lived impacts to the market which is weighed by weak demand.

China's purchase of primary aluminium fell short of the 160,000 tonnes initially planned because the State Reserves Bureau aims to hold three more tenders in its program to help smelters reeling from sluggish demand and low prices. However, total aluminium purchases may eventually exceed the 400,000 tonnes first expected by smelters and traders.

Sources said that the state body's purchase of refined zinc at another closed-door tender in the Chinese capital also missed an earlier target of 150,000 tonnes. With one of them quoting tender officials as saying smelters had not seemed keen to sell. They did not say whether they will hold another tender for the remaining 50,000 tonnes.

For zinc ingots, the state reserves body paid around CNY 15,980 per tonne to CNY 16,010 per tonne or about 7.7% over the front month contract on the Shanghai Futures Exchange which was trading at CNY 14,855 per tonne.

It paid around CNY 15,730 per tonne to CNY 15,760 per tonne of aluminium or about 4% above the CNY 15,150 price of the front month contract on the Shanghai Futures Exchange. That price rose to CNY 15,200 after the purchase.

Mr Jing Chuan chief researcher at Citic Futures said that "The price is a bit low for smelters that are not located close to the state reserves bureau's warehouses. The SRB may have to pay more to attract smelters to sell."

Source - Reuters

(www.steelguru.com)

This is alternative content.

/
Arcelor
More Metals News