Chalco: China privately holds up to 600 kT aluminium

China's privately held aluminium stocks total 500,000-600,000 tonnes, its top producer of the metal said on Wednesday, lower than analyst estimates but still a substantial overhang.

The estimate, given by Aluminum Corp of China Ltd (Chalco) (2600.HK) (601600.SS) president Luo Jianchuan at a news conference, equates to around half the 1.1 million tonnes that China imported in the first seven months of this year.

Aluminium output in China, the world's top producer, has been surging in response to prices that have risen by more than a quarter since the start of the year as China's State Reserves Bureau (SRB) stepped in to buy metal directly from smelters.

Chalco chairman Xiong Weiping said China's aluminium market was oversupplied and the situation would last for 3 years.

"China is having a surplus problem. If demand improves, it would take about 3 years time to get the oversupply easing,' Xiong told the news conference.

Analysts and smelter officials had estimated China's privately held aluminium stocks at around 700,000 tonnes.

Together with the State Reserves Bureau's purchases of 570,000 tonnes -- a figure provided by Chalco -- the tally covers the the entire imports for this year.

Chalco expects China to produce 13.2 million tonnes of primary aluminium this year, above consumption of 12.85 million tonnes, implying a surplus of around 350,000 tonnes.

That level of annual output would mean an average of 1.3 million tonnes a month for the last five months of the year, according to a Reuters calculation, ahead of the around 1 million tonnes for the past three months.

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