HONG KONG China's State Reserves Bureau (SRB) has issued a tender to buy 160,000 tonnes of primary aluminum from local smelters, two sources who received the tender notice said on Monday.
The tender is the first concrete sign that the country is resuming a programme of stockpiling base metals, with the sources saying the reserves body is set to hold the tender on Wednesday, although it was not announced on its website. (www.ndrc.gov.cn)
Last week, Reuters reported that China's influential state planner could revive its stockpiling plan as soon as this month to buy around 400,000 tonnes of primary aluminum ingots and 165,000 tonnes of refined copper cathode for state reserves.
This volume equates to around 8 days of consumption for refined copper and nearly 7 days for primary aluminum, and compares to China's current stocks of more than one million tonnes of both copper cathode and aluminum ingots.
"We think there will be another tender after the Wednesday one," said one of the sources, who declined to be identified because he is not authorized to speak to the media.
"But how many tonnes the SRB will buy, or smelters will sell, depends on prices," he said, referring to the prices offered by the state reserve body.
"We think the State Reserve Bureau will buy 160,000 tonnes first, then about 200,000 tonnes in the second tender later," said a source at another large smelter.
The move to resume stockpiling followed a proposal by an industry body for the state planner to buy base metals from domestic smelters hit by weak demand and battling conditions harsher than during the financial crisis of 2008/09.
Although China racked up annual GDP growth of 7.4 percent in the third quarter of 2012, that was its slowest pace since the depths of the financial crisis in the first quarter of 2009.
Unlike the launch of the inaugural stockpiling in 2008, the SRB has not officially announced current purchase plans this time round.
In December 2008 it said it planned to buy 1 million tonnes of aluminum, 400,000 tonnes of copper and a total of 400,000 of lead and zinc from domestic smelters over three years.
But it had only bought 235,000 tonnes of copper, 590,000 tonnes of primary aluminum and 159,000 tonnes of refined zinc by the end of that round.
Markets had been hoping for Beijing's new top rulers to announce stimulus measures following the once-in-a-decade leadership change set for the Communist Party congress underway in Beijing. [ID:nL3E8MA0E7] (Reporting by Polly Yam; Editing by Clarence Fernandez)