China urged to raise state aluminum reserves

An industry body representing China's metal producers has asked Beijing to buy more aluminum for state reserves to trim huge commercial stocks in the world's top market for the metal.

Mr Wen Xianjun head of the aluminum division at the state funded Nonferrous Metals Industry Association told Reuters that "We have suggested that the government buy aluminum for the state reserves.¡±

He added that "The proposal would not be necessarily approved without providing details of what was proposed.¡±

The State Reserve Bureau part of state planner the National Development and Reform Commission should be the buyer if Beijing agrees to the proposal.

State Reserve Bureau which manages strategic reserves from copper to grains is estimated to hold between 100,000 and 200,000 tonnes of primary aluminum in stocks, less than 6 days of apparent consumption in September.

A senior executive at a large aluminum smelter said the industry body had asked the state planner to boost aluminum stocks to 1 million tonnes, enough for China's consumption for just less than one month.

If the proposal is approved, smelters, including Aluminum Corp of China Ltd, will benefit given high stocks have weighed on prices since the summer. Smelter officials and analysts said that but such state buying may not turn around the downward trend of aluminum prices.

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