Aluminium drops as China buy is seen small

Print this page Posted on : 12-27-2008 by recycleinme.com

Dec. 26

Aluminium declined from a three-week high in Shanghai as a State purchase plan by China, the world's largest producer and consumer, was smaller than expected. The metal still posted the biggest weekly gain in ten weeks.

Chinas State Reserve Bureau will purchase 2,90,000 tonnes of aluminium at 12,350 yuan ($1,808) a tonne from domestic smelters to boost state reserves and stabilize prices by the end of January. The bureau may buy a total of 1 million tonnes of the metal over three months from January, analysts had said.

Aluminium for March delivery fell 1.6 per cent to 11,150 yuan a tonne on the Shanghai Futures Exchange, dropping from previous highest close since Dec. 3. The metal still gained 4 per cent this week, the biggest weekly advance since October. The metal closed 1.5 per cent down at $1,537 on the London Metal Exchange on Dec. 24, the last trading day before the Christmas holidays, bringing this year's loss to 36 per cent.

No Zinc Talks

Government officials, including those from the State Reserve Bureau, who are meeting aluminium producers this week, haven't scheduled meetings with makers of zinc or other metals yet, Mr Wen Xianjun, deputy chairman of the China Nonferrous Metal Industry Association, said in a phone interview from Beijing. As the aluminium purchase turned out to be this small, I wouldn't pin much hope on zinc, copper or other metals, Mr Zhao Kai, an analyst at Jinrui Futures Co., said from Shenzhen. Shanghai copper fell 2.2 per cent to 22,380 yuan a tonne and Shanghai zinc declined 0.8 per cent to 9,655 yuan a tonne.

Source : Business Line