China's State Reserves Bureau (SRB) bought 290,000 tonnes of primary aluminium from domestic smelters at 12,490-12,500 yuan per tonne on Friday, a price one percent higher than its December purchase, a source familiar with the deal said. Friday's purchase, SRB's second in less than two months, is part of Beijing's plan to support smelters due to weak demand.
The deal included 140,000 tonnes from Chinalco, the parent of Aluminium Corp of China Ltd (Chalco). "It bought 290,000 tonnes today," the smelter source said. "Chinalco sold 140,000 tonnes, while the rest was evenly divided by 6 or 7 smelters." The smelters were required to deliver the metal to various SRB warehouses between late February and early April, the source said.
The SRB paid for Friday's purchase at a 5 percent premium over the average spot aluminium prices 10 days before the bidding day, he added. In December, the state body bought 290,000 tonnes at 12,350 yuan per tonne from eight smelters, of which 150,000 tonnes came from Chinalco. That price was set at a 15 percent premium over the average spot aluminium prices 10 days before the bidding day.