Jewelry Microscope,Trinocular Digital Microscope,Professional Jewelry Microscopes,Stereo Binocular Jewelry Microscope Ningbo Huaguang Precision Instrument Co., Ltd. , https://www.hgopt.com
The State Reserve Bureau is reportedly preparing to resume its primary aluminum procurement efforts, with plans to buy 160,000 tons of raw aluminum from domestic producers in the near future. If all goes according to plan, total primary aluminum stockpiling could reach up to 400,000 tons, alongside an additional 165,000 tons of refined copper. Industry sources indicated that while the initial tender was scheduled for Wednesday, it might be delayed, with the next round expected to start this week.
Earlier reports suggested that the State Reserve Bureau would begin resuming its basic metal storage operations this month, potentially acquiring around 400,000 tons of primary aluminum and 165,000 tons of refined copper. Two corporate tender notices have already been issued, confirming the upcoming purchase of 160,000 tons of primary aluminum from domestic plants. However, as of now, no official documents have been published on the SDR website.
The scale of these purchases—400,000 tons of primary aluminum and 165,000 tons of refined copper—is equivalent to the daily consumption of refined copper on the 8th and the seven-day consumption of primary aluminum. In China, the current inventory of copper and aluminum ingots has surpassed 1 million tons, indicating a significant buildup of materials in the market.
Industry insiders mentioned that there are two possible lists of companies involved in this storage initiative. One includes names like China Aluminum, CPI, Qiaotou, Yinhai, Shaanxi Tongchuan, Shenhuo, and Wanji, while the other list features Wanfang, Yinhai, Yunlu, Shenhuo, Qiaotou, Chinalco, China Power Investment, Tongchuan, and Fushun. These firms are being considered as potential participants in the state-led storage program.
Nonferrous metal analysts noted that the current situation in the aluminum sector closely resembles that of 2009, when aluminum prices fell below production costs, leading to widespread industry losses. For example, a leading Chinese aluminum company reported losses of 4.335 billion yuan during the first three quarters of this year. The resumption of storage at this stage is expected to provide much-needed support to aluminum prices.
Historically, the last round of storage initiated at the end of 2008 helped push aluminum prices up by 30% from their lows, reaching 13,610 yuan per ton. However, after the government halted the program, prices dropped by over 8% from that peak.
Analysts pointed out that the current context differs slightly from 2009. While inventories were also high back then, the situation today is somewhat different. At the time, LME aluminum stocks reached 2.6 million tons, with 590,000 tons held in warehouse. Currently, LME stocks are around 5 million tons, which, although still high, is not as extreme as before. In 2009, the State Reserve Agency’s storage plan indirectly led to idle production capacity, putting pressure on prices before the program was suspended.
Zhang Wenwei, a secretary from Yunlv Dong, stated that the company has not yet received any official information about the procurement and storage plan. Once the program begins, it is likely to boost aluminum prices, but it won't directly impact the company's operational performance.
If the primary aluminum procurement and storage project gets underway, it will mark another major storage initiative following the 2008 financial crisis. The previous rounds took place in December 2008 and February 2009, with a total of 590,000 tons of aluminum collected. This new move is expected to have a similar effect on price stability and market confidence.
Storage and procurement programs have historically served as effective tools to stabilize markets during periods of oversupply and falling prices. As the industry faces continued challenges, such initiatives may play a crucial role in restoring balance and supporting long-term recovery.