Shanghai Aluminum Rises on China¡¯s Plan to Purchase the Metal

Aluminum climbed to a three-week high in Shanghai trading on a plan by the Chinese government to buy 290,000 metric tons of the metal to boost state reserves.

China will buy the metal from companies including Aluminum Corp. of China Ltd. and Yunnan Aluminum Co. at 12,350 yuan ($1,807) a ton next month, an executive who declined to be identified said today.

Prices are ¡°particularly strong due to the intensified state buying speculation,¡± Citic Futures Co.¡¯s Chen Yonglin said from Shanghai today.

Aluminum for March delivery rose 0.5 percent to 11,330 yuan a ton on the Shanghai Futures Exchange, the highest close since Dec. 3.

Executives from Aluminum Corp. of China, the country¡¯s largest smelter, and other producers are meeting government officials today and tomorrow to discuss the purchases.

China will increase reserves of ¡°important¡± raw materials, the Ministry of Industry and Information Technology reiterated last week. Officials from the government-controlled State Reserve Bureau, which holds reserves of commodities to regulate supply, were not immediately available for comment today.

Shanghai copper fell 0.9 percent to 22,880 yuan a ton and zinc declined 0.8 percent to 9,730 yuan a ton.

Margin deposits for trading copper, aluminum and zinc will be raised to 9 percent from Dec. 31, and the maximum price fluctuations will be increased to 6 percent on Jan. 5, the Shanghai exchange said in a statement on its Web site today, without saying when the risk control measures will end.

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